[Congressional Record Volume 144, Number 85 (Thursday, June 25, 1998)]
[Senate]
[Pages S7176-S7190]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        GRADUATE MEDICAL EDUCATION TECHNICAL AMENDMENTS OF 1998

  Ms. COLLINS. Mr. President, today I introduce the Graduate Medical 
Education Technical Amendments Act of 1998, which is intended to 
address some of the problems that small family practice residency 
programs in Maine and elsewhere are experiencing as a result of 
provisions in the Balanced Budget Act (BBA) of 1997 that were intended 
to control the growth in Medicare graduate medical education spending.
  Of specific concern are the provisions in the BBA that cap the total 
number of residents in a program at the level included in the 1996 
Medicare cost reports. Congress' goal in reforming Medicare's graduate 
medical education program was to slow down our nation's overall 
production of physicians, while still protecting the training of 
physicians who are in short supply and needed to meet local and 
national health care demands. While it is true that the BBA's 
provisions will curb growth in the overall physician supply, they do so 
indiscriminately and are thwarting efforts in Maine and elsewhere to 
increase the supply of primary care physicians in underserved rural 
areas.
  Because Maine has only one medical school--the University of New 
England, which trains osteopathic physicians--we depend on a number of 
small family practice residency programs to introduce physicians to the 
practice opportunities in the state. Most of the graduates of these 
residency programs go on to establish practices in Maine, many in rural 
and underserved areas of the state. The new caps on residency slots 
included in the BBA penalize these programs in a number of ways.
  For instance, the current cap is based on the number of interns and 
residents who were ``in the hospital'' in FY 1996. Having a cap that is 
institution-specific rather than program-specific has caused several 
problems. For instance, the Maine-Dartmouth Family Practice Residency 
Program had two residents out on leave in 1996--one on sick leave for 
chemotherapy treatments and one on maternity leave. Therefore, the 
program's cap was reduced by two, because it was based on the number of 
actual residents in the hospital in 1996 as opposed to the number of 
residents in the program.
  Moreover, residents in this program have spent one to two months 
training in obstetrics at Dartmouth's Mary Hitchcock's Medical Center 
in Lebanon, New Hampshire. Because the cap is based on a hospital's 
cost report, these residents are counted toward Dartmouth Medical 
School's cap instead of the Maine-Dartmouth Family Practice Residency 
Program's. Last year, the Maine program was informed that Dartmouth 
would be cutting back the amount of time their residents are there. But 
the Maine-Dartmouth Family Practice Residency Program has no way of 
recouping the resident count from them in order to have the funds to 
support obstetrical training for their residents elsewhere.
  Moreover, the cap does not include residents who continue to be part 
of the residency program, but who have been sent outside of the 
hospital for training. This penalizes all primary care specialties, but 
especially family medicine, where ambulatory training has historically 
been the hallmark of the specialty. This is particularly ironic since 
other specialty programs that now begin training in settings outside 
the hospital will, under the new rules, have those costs included in 
their Medicare graduate medical education funding.
  All told, the Maine Dartmouth Family Practice Residency Program will 
see its graduate medical education funding reduced by over half a 
million dollars a year as a result of the cap established by the BBA.
  The example I have just used is from Maine, but the problems created 
by the BBA's graduate medical education changes are national in scope. 
It has created disproportionately harmful effects on family practice 
residencies from Maine to Alaska. A recent survey of all family 
practice residency program directors has found that:
  56 percent of respondents who were in the process of developing new 
rural training sites have indicated that they will either not implement 
those plans or are unsure about their sponsoring institutions' 
continued support.
  21 percent of respondents report planning to decrease their family 
practice residency slots in the immediate future. The majority of those 
who are planning to decrease their slots are the sole residency program 
in a teaching hospital. This means that, under current law, they have 
no alternative way of achieving growth, such as through a reduction of 
other specialty slots in order to stay within the cap.

  And finally, the vast majority of family practice residencies did not 
have their full residency FTEs captured in the 1996 cost reports upon 
which the cap is based.

  In addition to this survey, we have anecdotal information from 
residencies across the country detailing how they have lost funding 
either because of where they trained their residents or because their 
residents had been extended sick or maternity leave. For example, one 
family practice residency in Washington State last year had an 
equivalent of 14 residents training outside of the hospital and four in 
the hospital. Under the BBA, their cap would be four. By contrast, had 
all of their residents been trained in the hospital up to this point, 
their payment base would have been capped at 18, even if they trained 
residents in non-hospital settings in the future.
  The Medicare Graduate Medical Education Technical Amendments Act, 
which I am introducing today, will address these problems by basing the 
cap on the number of residents ``who were appointed by the approved 
medical residency training programs for the hospital'' in 1996, rather 
than on the number of residents who were ``in the hospital.''
  I am also concerned that the Balanced Budget Act and its accompanying 
regulations will severely hamper primary care residency programs that 
are expanding to meet local needs. Specifically, a new residency 
program that had not met its full complement of accredited residency 
positions until after the cutoff date of August 5, 1997, is precluded 
from increasing its number of residents unless the hospital decreases 
the number of residents in one of its other specialty programs. 
However,

[[Page S7177]]

over forty percent of the nation's family practice residency programs 
are the only program sponsored by the hospital. This provision 
therefore completely precludes such a hospital from expanding its 
residency program to meet emerging primary care needs.
  To address this problem, the legislation I am introducing today would 
exempt the small number of programs at hospitals that sponsor just one 
residency program from the cap. In addition, to enable a number of 
family practice residency programs that are already in the pipeline to 
get accredited and grow to completion, the bill extends the cutoff date 
to September 1999.
  And finally, the Balanced Budget Act gave the Secretary of Health and 
Human Services the authority to give ``special consideration'' to new 
facilities that ``meet the needs of underserved rural areas.'' The 
Health Care Financing Administration has interpreted this to mean 
facilities that are actually in underserved rural areas. There have 
been several recent expansions in family practice residency programs 
that include a rural training track, with residents located in outlying 
hospitals, or with satellite programs designed specifically to train 
residents to work with underserved populations.
  Even though these new programs or satellites required accrediting 
body approval, they are still part of the ``mother'' residencies, which 
may not be physically located in an underserved rural area. While these 
are not technically new programs, I believe that the definition should 
be expanded to include such endeavors, given the value of these 
programs in addressing the needs of underserved populations. Therefore, 
the Medicare Graduate Medical Education Technical Amendments Act would 
expand the definition to include ``facilities which are not located in 
an underserved rural area, but which have established separately 
accredited rural training tracks.''
  Mr. PRESIDENT, while the changes I am proposing today are relatively 
minor and technical in nature, they are critical to the survival of the 
small family practice residency programs that are so important to our 
ability to meet health manpower needs in rural and underserved areas. I 
urge all of my colleagues to join me in cosponsoring the Medicare 
Graduate Medical Education Technical Amendments and ask unanimous 
consent that the text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows

                                S. 2216

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Graduate Medical Education 
     Technical Amendments of 1998''.

     SEC. 2. INDIRECT GRADUATE MEDICAL EDUCATION ADJUSTMENT.

       Section 1886(d)(5)(B)(v) of the Social Security Act (42 
     U.S.C. 1395ww(d)(5)(B)(v)) (as added by section 4621(b) of 
     the Balanced Budget Act of 1997) is amended by striking ``in 
     the hospital with respect to the hospital's most recent cost 
     reporting period ending on or before December 31, 1996'' and 
     inserting ``who were appointed by the hospital's approved 
     medical residency training programs for the hospital's most 
     recent cost reporting period ending on or before December 31, 
     1996. The preceding sentence shall not apply to a hospital 
     that sponsors only 1 allopathic or osteopathic residency 
     program.''.

     SEC. 3. DIRECT GRADUATE MEDICAL EDUCATION ADJUSTMENT.

       (a) Limitation on Number of Residents.--Section 
     1886(h)(4)(F) of the Social Security Act (42 U.S.C. 
     1395ww(h)(4)(F)) (as added by section 4623 of the Balanced 
     Budget Act of 1997) is amended by inserting ``who were 
     appointed by the hospital's approved medical residency 
     training programs'' after ``may not exceed the number of such 
     full-time equivalent residents''.
       (b) Funding for New Programs.--The first sentence of 
     section 1886(h)(4)(H)(i) of the Social Security Act (42 
     U.S.C. 1395ww(h)(4)(H)(i)) (as added by section 4623 of the 
     Balanced Budget Act of 1997) is amended inserting ``and 
     before September 30, 1999'' after ``January 1, 1995''.
       (c) Funding for Programs Meeting Rural Needs.--The second 
     sentence of section 1886(h)(4)(H)(i) of the Social Security 
     Act (42 U.S.C. 1395ww(h)(4)(H)(i)) (as added by section 4623 
     of the Balanced Budget Act of 1997) is amended by striking 
     the period at the end and inserting ``, including facilities 
     that are not located in an underserved rural area but have 
     established separately accredited rural training tracks.''.

     SEC. 4. EFFECTIVE DATE.

       The amendments made by this Act shall take effect as if 
     included in the enactment of the Balanced Budget Act of 1997.
                                 ______
                                 
      By Mr. FRIST (for himself, Mr. Rockefeller, Mr. Domenici, Mr. 
        Lieberman, Mr. Burns, Mr. Bingaman, Mr. Gramm, and Mr. Breaux):
  S. 2217. A bill to provide for continuation of the Federal research 
investment in a fiscally sustainable way, and for other purposes; to 
the Committee on Commerce, Science, and Transportation.


                    federal RESEARCH investment ACT

 Mr. ROCKEFELLER. Mr. President, I would like to join my 
colleagues Senators Frist, Lieberman, Domenici, Bingaman, Burns, Gramm, 
and Breaux in introducing the Federal Research Investment Act. This 
legislation will set a long-term vision for federal funding of research 
and development programs so that the United States can continue to be 
the world leader in high-tech industries.
  This is a very important time in our history. One only needs to look 
as far as the front page of the newspaper to see the effect of high-
technology on our country. New drugs are becoming available for 
fighting cancer; new communication hardware is allowing more people to 
connect to the internet; and advances in fuel-cell technology are 
leading to low-emission, high-efficiency hybrid vehicles. In fact, 
seventy percent of all patent applications cite non-profit or 
federally-funded research as a core component to the innovation being 
patented. People are living longer, with a higher quality of life, in a 
better economy due to processes, procedures, and equipment which are 
based on federally-funded research.
  What I am afraid of is that many people are not aware that these 
products do not just `come along.' They are the result of a basis of 
knowledge which has been built up by researchers supported by federal 
funding. American companies pull from this knowledge base in order to 
develop the latest high-tech products which you and I read about in the 
paper and see on our store shelves.
  I view this knowledge base as a bank. The US government puts in 
modest amounts of funding in the form of support for scientific 
research. The payback comes from the economic growth which is produced 
as this knowledge is turned into actual products by American companies. 
That is the good news.
  The bad news is that the United States has been withdrawing more than 
it has been depositing for several years now. Just this year we are 
looking at the first budget surplus in 29 years. A large part of the 
current rosy economic situation is due to our dominate high-tech 
industries. High-tech companies are currently responsible for one-third 
of our economic output and half of our economic growth. However, we 
have not been supporting the fundamental, pre-competitive research 
which is critical to these industries at the levels necessary to allow 
us to continue at this pace. We must act now in order to try to correct 
this situation.
  Recently, Senators Gramm  and Lieberman, along with Senators Domenici 
and Bingaman, introduced S. 1305 the National Research Investment Act. 
Their idea was to double R&D funding in 10 years, a very noble and 
courageous effort. Even more importantly, I think, this bill caused 
members of the scientific and engineering community to pull together 
and fight as a whole for an idea. It has certainly caused the co-
sponsors of this bill to pull together to try to move forward as a 
group with their original idea. Our bill is the next step in this 
process.
  This bill is a long-term vision for federal R&D funding. It creates 
legislative language which stresses the importance of R&D funding to 
the strength of our nation's innovation infrastructure. It also sets 
out guidelines for Congress to use in prioritizing funding decisions.
  Based on a careful review and analysis of our past history, our bill 
authorizes a real funding increase of 2.5% over the rate of inflation 
for the next 12 years for federally-funded, civilian, R&D programs. 
This would increase federal R&D spending from the current level of 2.1% 
to 2.6% of total, overall budget. It would also cause a doubling, in 
1998 dollars, of R&D funding in approximately 12 years. In order to 
make

[[Page S7178]]

sure that these increases are fully incorporated into budgetary process 
we request that the President include these increases in his annual 
budget request to Congress.
  Currently, as I have stated previously, we are in an economic upturn. 
This is the perfect time to increase funding for R&D so that we can 
continue this growth. I have faith that, as long as the economic 
situation allows it, my thoughtful and wise colleagues will support 
increasing R&D funding to the levels that we have laid out in this 
bill. However, I am also a realist. I realize that the economy may not 
always remain as strong as it is right now. That is why we have 
introduced a funding firewall. Without this firewall I am seriously 
concerned that history will repeat itself. In the past, R&D funding is 
one of the first things that has been cut during times of crisis. This 
is the wrong approach. I believe that cutting R&D funding levels below 
a bare minimum level causes serious, long-term harm to the R&D 
infrastructure in the United States. Our firewall would not allow this 
to happen. It is not meant as a goal, it is meant as a bare minimum 
which should only be implemented in the leanest of years.
  Many, if not most, recent `quantum leaps' in knowledge have occurred 
at the interface between traditional disciplines of research. 
Therefore, we legislatively mandate that this funding increase must be 
macroscopically balanced, so that there is not preferential growth of 
one agency, program or field of study at the expense of other, equally 
qualified and deserving agencies. One of the original reasons that I 
started to get involved with technology issues such as EPSCoR and 
EPSCoT, was because I believe that technology should be shared by 
everyone, not just those in Silicon Valley or the Route 128 corridor in 
Boston. Therefore, this bill should not be seen as a means of promoting 
elitist science but as a mechanism for allowing for diversity in our 
national innovation infrastructure.

  Finally, so that we are able to assure other Members of Congress and 
the general public that this money authorized by this Act would be well 
spent, we have included accountability measures which will assure that 
there is no waste of federal money on out-dated, or ill-conceived 
projects. This bill puts into place a system of accountability for each 
affected agency. Our bill institutes a study by the National Academy of 
Sciences to determine how to effectively measure the progress of R&D 
based agencies and then have them institute performance measures based 
on these metrics. This will allow increases in funding without concerns 
over wasteful spending being generated.
  In conclusion, with the help of Senators Gramm, Lieberman, Domenici, 
and Bingaman, Senator Frist and I have put together a long-term vision 
for federal R&D funding which we hope will instigate real increases in 
federal funding for research and development. Federally-funded research 
has been, and will continue to be, a driving power behind our economic 
success. If we are to maintain and enhance our current economic 
prosperity we must make sure that research programs are funded at 
adequate levels. I urge my colleagues to support this bill.
 Mr. LIEBERMAN. Mr. President, I am pleased to join my 
colleagues, the original cosponsors of S. 1305, the members of the 
Senate Science and Technology Caucus, and Senator Breaux, as an 
original cosponsor of S. 2217, the Frist-Rockefeller Federal Research 
Investment Act. This is the next step in the effort to restore federal 
civilian R&D investments to their historical levels and assure American 
leadership in science, technology, and innovation into the 21st 
century.
  I was pleased to introduce last October, along with Senators Gramm, 
Bingaman, and Domenici, the National Research Investment Act of 1998, 
S. 1305, which now has 19 cosponsors. S. 1305 has been an important 
coalition-building vehicle that served to galvanize support for federal 
R&D programs within the Congress. It is time, now, to move forward with 
a new legislative instrument that can move through the committee 
process and onto the floor.
  The Frist-Rockefeller bill adds an important policy piece to the 
Senate effort to double federal R&D investments--based upon the work 
this year of the Senate Science and Technology Caucus, which I co-Chair 
along with Senator Frist--and adds performance-based accountability 
provisions to ensure the quality of programs funded with new monies. 
The policy piece is especially valuable because it outlines an 
investment strategy that can serve as a useful complement to the very 
important efforts of the House Science Committee in drafting a national 
policy for federal R&D programs.
  We must fund research and development at levels commensurate with 
their contribution to the health and welfare of our citizenry. 
America's research enterprise is the most competitive and productive in 
the world. The strength of our innovation system depends on the steady 
stream of discovery that flows out of our nation's universities and 
industrial and national laboratories. The creation of new knowledge, 
and the education and training that is part and parcel of the 
knowledge-creation process, are critical enablers of wealth creation 
and future economic growth. I believe that adequately funding R&D and 
advanced scientific and technical education are two of the most 
effective measures we can undertake to promote the health and 
prosperity of America's high-tech economy.

  I welcome the leadership of Senators Frist and Rockefeller. I look 
forward to working with them to assure the continued success of 
America's science and technology enterprise.
  I'd like to take a moment to acknowledge the important work of the 
many people representing research and educational organizations who 
have labored long and hard to raise the level of understanding of those 
of us in Congress with respect to the contribution research makes to 
our national well being. They have helped to lay the groundwork for 
this legislation that was introduced today. Among those who have 
contributed to this effort are:
  Mike Lubell and Frances Slakey, American Physical Society;
  David Schutt and Melissa Kuckro, American Chemical Society;
  Greg Schuckman and Pete Leon, American Association of Engineering 
Societies;
  Kathy Tollerton, American Society for Engineering Education;
  Mike Matlack, the National Society of Professional Engineers;
  Raymond Paul, Institute of Electrical and Electronic Engineers;
  Suzy Glucksman, American Society of Mechanical Engineers;
  Sam Rankin, American Mathematical Society;
  David Peyton, National Association of Manufacturers;
  Stephanie Stitzer, American Electronics Association;
  Taffy Kingscott, Coalition for Technology Partnerships, and the 
Semiconductor Industry Association;
  Betsy Houston, Federation of Materials Societies;
  Ron Kelley, Materials Research Society;
  Elizabeth Baldwin, Optical Society of America;
  Jerry Roschwalb, National Association of State Universities and Land-
Grant Colleges;
  George Leventhal, Association of American Universities;
  Richard O'Grady and Jodi Kolber, American Institute of Biological 
Sciences;
  Brian Gottlieb, American Society for Microbiology;
  Nadine Lymn, Ecological Society of America;
  Peter Folger, American Geophysical Union; and
  Stephanie Beck, Research America! 
                                 ______
                                 
      By Mr. SARBANES (for himself, Mr. Faircloth, Mr. Warner, Ms. 
        Mikulski, and Mr. Robb):
  S. 2218. A bill to require the Secretary of the Army, acting through 
the Chief of Engineers, to evaluate, develop, and implement a strategic 
master plan for States on the Atlantic Ocean to address problems 
associated with toxic microorganisms in tidal and non-tidal wetlands 
and waters; to the Committee on Environment and Public Works.


    atlantic coast toxic microorganism environmental remediation act

 Mr. SARBANES. Mr. President, today I am introducing 
legislation, together with my colleagues Senators Faircloth, Warner, 
Mikulski and Robb, to help address the serious problems posed by toxic 
microorganisms that are affecting the tidal and non-tidal wetlands and 
waters of the States along

[[Page S7179]]

the eastern seaboard. The ``Atlantic Coast Toxic Microorganism 
Environmental Remediation Act'' authorizes the Army Corps of Engineers 
to develop and implement a strategy to mitigate current and potential 
problems posed by these aquatic microorganisms.
  Serious outbreaks of toxic microorganisms, such as Pfiesteria and 
Pfiesteria-like dinoflagellates, have recently struck inland waters and 
estuaries in Maryland, North Carolina, Delaware, Florida, and Virginia. 
Linked to the flow of excess nutrients and loss of habitat, these toxic 
microorganisms are seriously impacting regional economies and 
threatening finfish resources and economic and recreational sectors 
along the Atlantic Coast.
  Between 1972 and 1995, the number of coastal and estuarine waters 
that host major, recurring attacks by harmful microbes has doubled. 
Last year alone, approximately 450,000 fish were killed in North 
Carolina by Pfiesteria, while tens of thousands of valuable fish met 
the same fate in tidal rivers in the eastern shore of my own State of 
Maryland last year. There are other harmful microbes, as well, that are 
similar to Pfiesteria in their effects and that may be poised in a 
moments notice to wreck havoc on our aquatic ecosystems and communities 
and which may pose serious threats to human health and safety.
  In 1982, scientists were aware of 22 species of harmful water-borne 
dinoflagellates; now they are aware of over 60! So, we now face a 
situation where more than five dozen different harmful microbes can 
potentially produce catastrophic economic and environmental effects in 
waters extending along the eastern seaboard.
  Experts note that such harmful attacks are increasing in frequency or 
severity in aquatic environments both in the United States and 
worldwide. Toxic dinoflagellates and harmful algae are microscopic, 
single-celled organisms that live in the sea, estuaries and near-shore 
inland waters along our coasts. Most species are not harmful, and are a 
key element in the aquatic food web. Unfortunately, a small number of 
these species also produce potent neurotoxins than can affect and even 
kill higher forms of life, such as shellfish, finfish, birds, marine 
mammals, as well as impact human health.
  Last year, the Administration directed that an interagency research 
and monitoring strategy be developed in response to the outbreaks of 
Pfiesteria in the Chesapeake Bay. Seven federal agencies participated 
in developing this strategy including NOAA, EPA, the Departments of 
Interior and Agriculture and the Centers for Disease Control. Funding 
to implement actions called for under the plan and the Administration's 
Clean Water Initiative was included in the fiscal 1999 budget request. 
Unfortunately, the key Federal agency with expertise in water resources 
and aquatic habitat restoration--the Army Corps of Engineers--was not 
included in the interagency task force and habitat and related 
considerations were not integrated into the response plans.
  The bill I am introducing seeks to address this shortcoming and to 
ensure that all the available expertise of the Federal government is 
brought to bear in combating these biotoxins. The legislation 
authorizes the Army Corps of Engineers, in partnership with State and 
local governments as well as other Federal agencies, to conduct an 
evaluation, develop a strategic master plan, and implement recommended 
actions to address problems in the degradation of aquatic habitat 
related to the presence of toxic microbes, including Pfiesteria, in 
wetlands and waters along the Atlantic coast. With its expertise in 
watershed management and restoration, the U.S. Army Corps of Engineers 
has a vital role to play in responding to the threats posed by toxic 
microorganisms and this legislation provides the funding and authority 
for this agency to do so.
  Mr. President: I ask unanimous consent that the full text of the bill 
be included in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2218

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Atlantic Coast Toxic 
     Microorganism Environmental Remediation Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) effective protection of tidal and nontidal wetlands and 
     waters of the United States is essential to sustain and 
     protect ecosystems, as well as recreational, subsistence, and 
     economic activities dependent on those ecosystems;
       (2) the effects of increasing occurrences of toxic 
     microorganism outbreaks can adversely affect those ecosystems 
     and their dependent activities; and
       (3) there needs to be a comprehensive evaluation, 
     development, and implementation of strategic master plans for 
     States.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Secretary.--The term ``Secretary'' means the Secretary 
     of the Army, acting through the Chief of Engineers.
       (2) State.--The term ``State'' means a State on the coast 
     of the Atlantic Ocean.
       (3) Toxic microorganisms.--The term ``toxic 
     microorganisms'' includes Pfiesteria piscicida and other 
     potentially harmful aquatic dinoflagellates.

     SEC. 4. STUDY AND STRATEGY FOR AQUATIC HABITAT REMEDIATION.

       (a) In General.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary shall evaluate, develop, 
     and implement a strategic master plan for each State (on a 
     watershed basis) to address problems associated with the 
     degradation of ecosystems and their dependent activities 
     resulting from toxic microorganisms in tidal and nontidal 
     wetlands and waters.
       (b) Federal and Non-Federal Shares.--
       (1) Federal share.--The Federal share of the cost of 
     evaluating, developing, and implementing a strategic master 
     plan for a State under subsection (a) shall be 75 percent.
       (2) Non-federal share.--The non-Federal share of the cost 
     of evaluating, developing, and implementing a strategic 
     master plan for a State under subsection (a) shall be 
     provided in the form of cash, in-kind services, or materials.
       (c) Cooperative Agreements.--Subject to subsection (b), in 
     carrying out this section, the Secretary may enter into 
     cooperative agreements with Federal, State, and local 
     government agencies under which the Secretary shall provide 
     financial assistance to implement actions identified in each 
     watershed strategic master plan.
       (d) Implementation.--The Secretary shall carry out this 
     section in cooperation with--
       (1) the Secretary of the Interior;
       (2) the Secretary of Agriculture;
       (3) the Administrator of the Environmental Protection 
     Agency;
       (4) the Administrator of the National Oceanic and 
     Atmospheric Administration;
       (5) the heads of other appropriate Federal, State, and 
     local government agencies; and
       (6) affected local landowners, businesses, and commercial 
     entities.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section 
     $15,000,000.
                                 ______
                                 
      By Mr. KERREY:
  S. 2219. A bill to direct the Secretary of the Interior to convey 
certain irrigation project property to certain irrigation districts in 
the State of Nebraska; to the Committee on Energy and Natural 
Resources.


     missouri river basin, middle loup division project facilities 
                             conveyance act

 Mr. KERREY. Mr. President, today I am introducing the 
``Missouri River Basin, Middle Loup Division Project Facilities 
Conveyance Act.''
  The bill provides for the transfer of title of irrigation project 
facilities and lands from the Bureau of Reclamation, U.S. Department of 
Interior to the Middle Loup Division irrigation districts in central 
Nebraska. These districts have operated the facilities there for over 
35 years.
  The project facilities are part of the Missouri River Basin Project, 
and provide water from the Middle Loup River to over 64,000 acres of 
irrigable land, as well as providing recreation and fish and wildlife 
benefits. Principal features of the projects include the Sherman Dam 
and Reservoir, the Arcadia Diversion Dam, the Milburn Diversion Dam, 
irrigation canals and laterals, drains and pumping plants.
  Crops grown on these irrigated lands primarily include alfalfa, small 
grains, sugar beets, and corn to provide feed for a thriving livestock-
feeding economy in my state of Nebraska, which includes beef cattle, 
hogs, and poultry.
  In 1995 the Vice President indicated that the Bureau of Reclamation 
of the U.S. Department of Interior should transfer title to allow local 
ownership of irrigation projects such as this. The Bureau has indicated 
to me that this project is a top candidate for title transfer to be 
achieved. When this legislation passes, Nebraska will become the first 
state where title transfer efforts have been successful.

[[Page S7180]]

  A Nebraska-Middle Loup River Community Environmental Trust Fund is 
also created through the transfer, to be administered by a 7-member 
Interlocal Cooperation Agency (ICA). The fund is to be used for 
environmental and conservation enhancements to project lands and 
facilities, as agreed to by the 7-member ICA, and cannot be used for 
routine operation and maintenance of the project or facilities.
  The irrigation projects and facilities were constructed between 1955 
and 1966 under authorities of the Flood Control Act of 1944, and are 
currently operated and maintained under contracts between the Bureau 
and the irrigation districts and power producers. The transfer will 
provide for total repayment of all outstanding obligations on behalf of 
the irrigation districts and power producers, while retaining all 
current uses and purposes for the projects.
  Mr. President, I urge my colleagues to join me in support of this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2219

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Missouri River Basin, Middle 
     Loup Division Project Facilities Conveyance Act''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Project.--The term ``project'' means each of the 
     irrigation projects constructed by the United States under 
     the Act of December 22, 1944 (commonly known as the ``Flood 
     Control Act of 1944'') (58 Stat. 887, chapter 665), described 
     as the ``Missouri River Basin, Middle Loup Division Project'' 
     and locally known as the ``Farwell Irrigation Project'' and 
     the ``Sargent Irrigation Project''.
       (2) Project beneficiary.--The term ``project beneficiary'' 
     means--
       (A) the Farwell Irrigation District, Sargent Irrigation 
     District, and Loup Basin Reclamation District, each of which 
     is organized as a subdivision of government under the law of 
     the State of Nebraska;
       (B) a combination of the irrigation districts or 
     reclamation district; and
       (C) an organization established by 1 or more of the 
     irrigation districts or reclamation district under the law of 
     the State of Nebraska as an interlocal cooperation agency.
       (3) Project property.--The term ``project property'' 
     means--
       (A) all contracts in effect on the date of enactment of 
     this Act between the United States and a project beneficiary 
     or other person that relate to a project or project facility, 
     including any written or unwritten contract to provide power 
     from a Federal power facility under the Act of December 22, 
     1944 (58 Stat. 887, chapter 665);
       (B) all project distribution and drainage facilities, all 
     reservoir and related diversion facilities, and all related 
     land owned by the United States as of the date of enactment 
     of this Act that the Secretary determines to be related to a 
     project;
       (C) all acquired land (including the surface estate and the 
     subsurface estate) within a project;
       (D) all water rights held by the United States relating to 
     the project facilities;
       (E) all right, title, and interest in all outstanding 
     contracts, leases, licenses, outgrants, or permits on or 
     relating to land associated with a project; and
       (F) all personal property (including operating equipment, 
     tools, materials, and other tangible personal property) owned 
     by the United States that is used for the purpose of 
     operating the project or serving the project facility.
       (4) Project purpose.--The term ``project purpose'' means 
     use of the project property and the water supply of the 
     project (consistent with the recent use and experience with 
     the project and not limited to the use envisioned when the 
     project was originally authorized, and consistent with 
     section 8) to--
       (A) provide irrigation water for project land to which the 
     project water rights are assigned;
       (B) enhance the agricultural economy of the area served by 
     the project;
       (C) stabilize the water supply from surface and ground 
     water sources in the area served by the project;
       (D) develop and protect fish and wildlife resources native 
     to the area served by the project; and
       (E) develop and manage water- and land-based recreation 
     facilities in the area that are related to the project 
     property.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.

     SEC. 3. CONVEYANCE.

       (a) Conveyance.--
       (1) In general.--On January 1, 2000 (or on any earlier date 
     that is agreeable to the Secretary and the project 
     beneficiaries), the Secretary may, on terms in accordance 
     with this Act, convey by quitclaim deed, patent, or other 
     appropriate instrument, all right, title, and interest of the 
     United States in and to the project property to the project 
     beneficiaries, in the name or names of project beneficiaries 
     as the project beneficiaries may determine.
       (2) Contaminated property.--
       (A) Remedial action.--Notwithstanding section 120(h)(3) of 
     the Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9620(h)(3)) or any other 
     law, the Secretary shall make the conveyance under paragraph 
     (1) not later than January 1, 2000, without regard to whether 
     all necessary remedial action required under that Act on any 
     part of the project property has been completed by that date.
       (B) Effect.--Subparagraph (A) does not--
       (i) relieve the United States of the obligation to complete 
     any required remedial action expeditiously; or
       (ii) place any obligation on the project beneficiaries to 
     conduct or contribute to payment of the costs of any remedial 
     action.
       (3) Completion of nepa studies and reports.--The Secretary 
     shall cause all studies and reports required on the project 
     property under the National Environmental Policy Act of 1964 
     (42 U.S.C. 4321 et seq.) relating to the conveyance under 
     paragraph (1) to be completed as far in advance of January 1, 
     2000, as practicable.
       (b) Consideration.--The conveyance of the project property 
     under subsection (a) shall be for consideration totaling 
     $5,030,000, to be paid to the United States for credit 
     against the Reclamation Projects Funds for the Missouri River 
     Basin Project, as follows:
       (1) Payment by project beneficiaries.--
       (A) In general.--On the date of conveyance, the project 
     beneficiaries shall pay the Secretary $3,530,000.
       (B) Crediting of contract payments.--There shall be 
     credited against the amount specified in subparagraph (A) the 
     amount of any payments made by the project beneficiaries 
     between July 1, 1998, and December 31, 1999, under contracts 
     between the project beneficiaries and the United States.
       (2) Payment by power producers.--
       (A) In general.--On the date of conveyance, the power 
     producers under the Pick-Sloan Missouri Basin Program shall 
     pay the Secretary $1,500,000.
       (B) Payment source.--As a source of funds for the payment 
     under subparagraph (A), the power producers may use power 
     sale revenues received in fiscal year 1998 or any subsequent 
     fiscal year in which the amount of power sale revenues 
     received exceeds the amount of interest and operation and 
     maintenance obligations.
       (c) Satisfaction of Outstanding Obligations.--
       (1) In general.--The payment of the sums provided for in 
     subsection (b) shall be in full and complete satisfaction of 
     all obligations against the project property, the project 
     beneficiaries, and Missouri River Basin power producers 
     existing before the date of conveyance of the project 
     property under any contracts entered into between the United 
     States, the project beneficiaries, or the Missouri River 
     Basin power producers or under any obligations that may have 
     been required by the Act of December 22, 1944 (58 Stat. 887, 
     chapter 665) or other related Federal law.
       (2) Satisfaction of obligations.--The completion of the 
     conveyance of all project facilities under this Act and the 
     payment of the consideration specified for the projects shall 
     constitute full satisfaction of any and all obligations for 
     further payments or repayments by the respective project 
     beneficiaries or by the Missouri River Basin power producers 
     for irrigation benefits of the project property and for any 
     other benefits conveyed to the project beneficiaries.
       (d) Conveyance Documents.--
       (1) In general.--With the assistance of the project 
     beneficiaries, the Secretary--
       (A) shall execute and deliver to the project beneficiaries 
     all necessary conveyance documents (including quitclaim land 
     deeds, court proceedings, decrees, bills of sale, 
     certificates of title, lease contract transfers, water rights 
     certificates and amendment documents, and notice filings) and 
     make all such filings as may be required of the transferor; 
     and
       (B) take all such actions as may be required to consummate 
     the conveyance of project property.
       (2) Filing costs.--The cost of any required filing of 
     documents shall be paid by the project beneficiaries.
       (e) Assumptions of Obligations.--On the date of the 
     conveyance under subsection (a), the project beneficiaries 
     shall--
       (1) assume the rights and responsibilities under the 
     contracts, leases, licenses, outgrants, and permits referred 
     to in section 2(3)(E); and
       (2) during the continued term of each contract, lease, 
     license, outgrant, and permit, carry out all responsibilities 
     of the United States under the contract, lease, license, 
     outgrant, or permit unless released by the holder of the 
     contract, lease, license, outgrant, or permit.
       (f) No Diminishment of Estate.--The Secretary shall not 
     transfer, modify, or restrict the interest of the United 
     States in any part of the project property after the date of 
     enactment of this Act and before the date of the conveyance 
     under subsection (a).
       (g) Effect of Agreement by Project Beneficiaries.--

[[Page S7181]]

       (1) In general.--By accepting the conveyance under 
     subsection (a), the project beneficiaries agree--
       (A) to operate, maintain, repair, replace, and rehabilitate 
     the project in a manner designed to carry out the project 
     purposes; and
       (B) to cooperate with each person holding a contract, 
     lease, license, outgrant, or permit referred to in section 
     2(3)(E) so as to ensure that the rights of the person under 
     the contract, lease, license, outgrant, or permit are 
     preserved after the conveyance.
       (2) Notifications.--The project beneficiaries shall be 
     responsible for notifying all State, regional, and local 
     authorities (including authorities responsible for dam 
     safety, monitoring, and inspections, water quality 
     monitoring, and inspections and administration of water 
     rights) regarding the conveyance of project property and the 
     assumption of ownership of the project.
       (h) Payment of NEPA Study Costs.--All costs incurred by the 
     United States in preparation of studies and reports required 
     under the National Environmental Policy Act of 1969 (42 
     U.S.C. 4321 et seq.) relating to the conveyance under 
     subsection (a)--
       (1) up to the sum of $170,000, shall be paid equally by the 
     United States and the project beneficiaries; and
       (2) in excess of $170,000, shall be paid solely by the 
     United States.

     SEC. 4. MIDDLE LOUP DRAINAGE FACILITIES AND LAND.

       (a) Responsibility for Drainage Work.--
       (1) In general.--Except for any drainage work that is made 
     necessary by acts or omissions of project beneficiaries in 
     connection with project operations, any repair or 
     modification of drainage work in existence on the date of 
     enactment of this Act or any development of new additional 
     drainage work that the project beneficiaries, in cooperation 
     with Loup City, Nebraska, and the landowners on whose land 
     drainage works exist at any time, determine is necessary to 
     satisfactorily limit or reduce ground water encroachment on 
     the land described in subsection (b), shall be the financial 
     responsibility of the United States to the extent provided in 
     paragraph (2).
       (2) Racheting down of financial responsibility of the 
     united states.--For drainage work performed in the following 
     fiscal years, the United States shall have financial 
     responsibility for the following percentages of the cost of 
     the drainage work, and the project beneficiaries shall have 
     financial responsibility for the remainder:

Fiscal year:                                                Percentage:
  2000.........................................................100 ....

  2001..........................................................95 ....

  2002..........................................................90 ....

  2003..........................................................85 ....

  2004..........................................................80 ....

  2005..........................................................75 ....

  2006..........................................................70 ....

  2007..........................................................65 ....

  2008..........................................................60 ....

  2009..........................................................55 ....

  2010..........................................................50 ....

  2011..........................................................45 ....

  2012..........................................................40 ....

  2013..........................................................35 ....

  2014..........................................................30 ....

  2015..........................................................25 ....

  2016..........................................................20 ....

  2017..........................................................15 ....

  2018..........................................................10 ....

  2019...........................................................5 ....

  2020 and thereafter............................................0.....

       (b) Description of Land.--The land described in this 
     subsection is all land--
       (1) in which the United States has any interest in the 
     valley of the Middle Loup River in and around Loup City, 
     Nebraska;
       (2) that was developed or acquired by the United States for 
     the purposes of collecting and draining excess ground water; 
     and
       (3) that is entirely outside the political subdivision 
     boundaries of the project beneficiaries.

     SEC. 5. LIABILITY.

       Beginning on the date of the conveyance of the project 
     property under section 3(a), the United States shall not be 
     liable for damages arising out of any act, omission, or 
     occurrence relating to the project property or a project 
     except for damages caused by an act or omission of the United 
     States or an employee, agent, or contractor of the United 
     States before that date.

     SEC. 6. MAINTENANCE OF PROJECT PURPOSES AND BENEFITS AND 
                   CREATION OF TRUST FUND.

       (a) Continuation of Project Purposes.--
       (1) In general.--All project property conveyed under 
     section 3 shall, to the extent practicable, be operated and 
     maintained to achieve the project purposes.
       (2) Applicability of laws.--Operations of all project 
     property conveyed under section 3 shall be subject to Federal 
     and State laws under which the irrigation districts and 
     reclamation district were established and the irrigation 
     districts and reclamation district conduct operations.
       (3) Other uses of project facilities.--All other uses of 
     project facilities consistent with those laws and the 
     operation of irrigation facilities, including fish, wildlife, 
     and recreation uses, shall be preserved, protected, and 
     enhanced to the extent practicable by the project 
     beneficiaries.
       (b) Nebraska-Middle Loup River Community Environmental 
     Trust Fund.--
       (1) Establishment.--As a condition to the conveyance under 
     section 3, the project beneficiaries shall establish a fund, 
     to be known as ``Nebraska-Middle Loup River Community 
     Environmental Trust Fund''.
       (2) Administration.--The fund shall be administered by an 
     interlocal cooperation agency, organized under State law by 
     the project beneficiaries, that includes at least--
       (A) 1 member selected by the Loup Basin Reclamation 
     District;
       (B) 1 member each selected by the Farwell Irrigation 
     District and the Sargent Irrigation District;
       (C) 1 member from the Nebraska Game and Parks Commission, 
     to be selected by the Commission;
       (D) 1 member from the Nebraska Natural Resources 
     Commission, to be selected by the Commission;
       (E) 1 member of the Lower Loup Natural Resources District, 
     selected by the District; and
       (F) 1 member from the Nebraska Department of Water 
     Resources, to be selected by the Governor of the State of 
     Nebraska.
       (3) Deposit.--On receipt of payment of consideration under 
     section 3(b), the Secretary shall deposit the payment in the 
     fund.
       (4) Use of fund.--
       (A) In general.--Amounts in the fund shall be used to 
     preserve, protect, enhance, and manage project property in a 
     manner that the interlocal cooperation agency determines is 
     necessary to achieve the project purposes, including actions 
     to--
       (i) stabilize water supplies;
       (ii) conserve water and land resources;
       (iii) improve and enhance fisheries and recreational 
     opportunities; and
       (iv) expand knowledge of water and land sources for 
     enhancing project operations to improve the service of 
     project purposes.
       (B) Prohibition.--Amounts in the fund shall not be used for 
     any routine operation and maintenance work by the project 
     beneficiaries or any cooperator, lessee, licensee, or 
     permittee of the project beneficiaries.

     SEC. 7. ARCHAEOLOGICAL PRESERVATION RESPONSIBILITIES.

       (a) In General.--The Secretary shall complete all 
     investigation and preservation activities required under the 
     National Historic Preservation Act (16 U.S.C. 470 et seq.) at 
     archaeological sites on project property that, before the 
     date of the conveyance under section 3(a), have been 
     identified as being subject to the requirements of that Act.
       (b) Easement.--At the time of the conveyance of the project 
     property, the project beneficiaries shall convey to the 
     Secretary an easement to each archaeological site described 
     in subsection (a) for the purpose of retaining access to and 
     full use of the site for the purposes of concluding any 
     required archaeological activity at the site.
       (c) Effect on Project Operation.--The Secretary shall--
       (1) ensure that archaeological activity at an 
     archaeological site described in subsection (a) does not 
     adversely affect the integrity of the operation any project 
     property; or
       (2) to the extent that it is not practicable for the 
     Secretary to avoid any adverse effect, provide such 
     alternative facilities as are necessary to maintain project 
     integrity.

     SEC. 8. MODIFICATION OF PROJECT PURPOSES.

       The purposes of the project are modified to exclude flood 
     control.
                                 ______
                                 
      By Mr. JOHNSON:
  S. 2220. A bill to provide the President with expedited Congressional 
consideration of line item vetoes of appropriations and targeted tax 
benefits; to the Committee on the Budget and the Committee on 
Governmental Affairs, jointly, pursuant to the order of August 4, 1977, 
with instructions that if one Committee reports, the other Committee 
have thirty days to report or be charged.


                the legislative line item rescission act

  Mr. JOHNSON. Mr. President, I rise today in response to the decision 
by the Supreme Court striking down the Line Item Veto Act.
  Today's decision does not surprise many who have looked closely at 
the constitutional questions raised by this law. The fundamental flaw 
of the Line Item Veto Act was that it violated the Presentment Clause 
of the Constitution by attempting to give the President the power to 
amend legislation passed by Congress. In the words of Justice Stevens, 
who wrote for the majority of the Court, ``If the Line Item Veto Act 
were valid, it would authorize the President to create a different 
law--one whose text was not voted on by either House of Congress or 
presented to the President for signature.''
  The majority opinion goes on to state that ``if there is to be a new 
procedure in which the President will play a different role in 
determining the final text'' of a law, such change can only result from 
amending the Constitution.
  Some of my colleagues, in reaction to today's decision, have already 
announced their support for a constitutional amendment giving the 
President this power. I hope that, in their haste, they do not overlook 
a legislative alternative that I am introducing in the Senate today to 
create a process for expedited consideration of presidentially-proposed 
rescissions.

[[Page S7182]]

  I have been a supporter of line-item rescission legislation since the 
beginning of my first term in the House of Representatives. I first 
introduced legislation in August 1987, and I was pleased to see support 
for this concept grow over the years.
  In November 1987, I wrote to President Reagan's Chief-of-Staff, 
Howard Baker, to request that line-item rescission be discussed during 
the Economic Budget Summit that was held during that year. Although the 
administration declined this request, President Reagan's budget 
proposal for Fiscal Year 1989 contained a proposal for line-item 
rescission that was very similar to the legislation that I had 
introduced.
  Support continued to grow, and a variety of versions of this 
legislation were introduced in the House. Eventually, the supporters of 
line-item rescission banded together in 1992 behind a common vehicle, 
H.R. 2164, which passed the House in October of that year. Insufficient 
time was available in the legislative year, however, for the Senate to 
take up the bill.
  After the momentous elections in the fall of 1992, I met with Karen 
Hancox of President-elect Clinton's transition team. I requested that 
Clinton support the line-item rescission concept. His endorsement 
helped win easy House passage of H.R. 1578 on April 29, 1993. To my 
disappointment, however, the Senate did not take up consideration of 
this bill, and the 103rd Congress adjourned without progress.
  The 104th Congress brought a change in control of the Congress. With 
that partisan shift came an inclination to support a new form of line-
item rescission, the so-called legislative line-item veto. Unlike line-
item rescission, the line-item veto stated that the president's 
rescissions were to be considered automatically approved unless 
overridden by a two-thirds vote of both the House and the Senate. 
Although still a cosponsor of line-item rescission, I voted for the new 
bill with the knowledge that it would receive constitutional scrutiny 
by the courts.
  Now that the Supreme Court has ruled, I believe that Congress should 
take another look at line-item rescission. The bill I submit today, S. 
2220, does not cede power to the President to alter an act of Congress. 
Instead, it provides for an up-or-down vote in Congress of rescissions 
proposed by the President, thus exposing controversial items of 
spending to the light of day. If Congress believes the spending is 
merited, then it will vote to reject the rescission bill. Likewise, if 
the spending does not stand up to scrutiny, Congress can pass the 
rescission bill with a majority vote in each house and send it to the 
President for signature.
  The American Law Division of the Congressional Research Service has 
conducted a preliminary review of my bill. According to this review, S. 
2220 would meet the standard outlined in today's Court decision since 
the bill would not cede to the President the power to alter the text of 
legislation passed by Congress.
  It seems clear that we still need a mechanism to highlight items of 
wasteful spending and to force a vote on this spending. Line-item 
rescission accomplishes this feat without unduly altering the balance 
of power between the legislative and executive branches of government. 
Before running off to amend the Constitution, we should give line-item 
rescission a try.
                                 ______
                                 
      By Mr. GRASSLEY (for himself, Mr. Reid, Mr. Hollings, and Mr. 
        D'Amato):
  S. 2222. A bill to amend title XVIII of the Social Security Act to 
repeal the financial limitation on rehabilitation services under part B 
of the Medicare Program; to the Committee on Finance.


    Reinstatement of the Medicare Rehabilitation Benefit Act of 1998

  Mr. GRASSLEY. Mr. President, today I introduce the ``Reinstatement of 
the Medicare Rehabilitation Benefit Act of 1998 with my colleagues, 
Senators Reid, Hollings, and D'Amato. This legislation will enable 
seniors to receive rehabilitative services based on their condition and 
not on arbitrary payment limits. A similar version was introduced in 
the House of Representatives by Congressman Ensign earlier this year.
  The Balanced Budget Act of 1997 is a very important accomplishment 
and one that I am proud to say I supported. However, in our rush to 
save the Medicare Trust Fund from bankruptcy, Congress neglected to 
thoroughly evaluate the impact the new payment limits on rehabilitative 
services would have on Medicare beneficiaries.
  The BBA included a $1500 cap on occupational, physical and speech 
therapy services received outside a hospital setting. According to a 
recent study by Muse & Associates, these limitations on services would 
harm almost 13 percent (or 653,000) of Medicare beneficiaries because 
these individuals would exceed the cap. While many seniors will not 
need services that would cause them to exceed the $1500 cap, others, 
like stroke victims, will likely need services beyond what the 
arbitrary caps will cover. Unfortunately, it is those beneficiaries who 
need rehabilitative care the most who will be penalized by being forced 
to pay the entire cost for these services outside of a hospital 
setting.
  The bill I am introducing would repeal the cap, which is scheduled to 
go into effect in January 1999. The Secretary of the Department of 
Health and Human Services would be required to implement a prospective 
payment system that would recoup any savings lost from the repeal of 
this provision by January 2000. In essence, the bill attempts to 
accomplish the primary goal of the $1500 cap, budgetary savings, but 
without harming the Medicare beneficiary. Payment is based on the 
patient's condition and not on an arbitrary monetary amount. Help us 
repeal the $1,500 cap, establish a system that makes sense, and still 
achieve the budget savings sought from the BBA without reducing 
Medicare benefits.
  Please join me and my colleagues in passing this legislation. I ask 
unanimous that the full text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2222

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Reinstatement of the 
     Medicare Rehabilitation Benefit Act of 1998''.

     SEC. 2. REPEAL OF FINANCIAL LIMITATION ON REHABILITATION 
                   SERVICES.

       (a) Repeal.--
       (1) In general.--Section 1833 of the Social Security Act 
     (42 U.S.C. 1395l) is amended by striking subsection (g).
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to services furnished on or after January 1, 
     1999.
       (b) Offsetting Portion of Additional Expenditures Through 
     Payment Reform.--
       (1) In general.--Notwithstanding any other provision of 
     law, for outpatient physical therapy services, outpatient 
     occupational therapy services, and outpatient speech-language 
     pathology services covered under title XVIII of the Social 
     Security Act and furnished on or after January 1, 2000, the 
     Secretary of Health and Human Services shall implement a new 
     payment methodology based on the classification of 
     individuals by diagnostic category, functional status, and 
     prior use of services in both inpatient and outpatient 
     settings.
       (2) Budget neutrality in implementation.--Such payment 
     methodology shall be designed so that the methodology, taking 
     into account the increased expenditures resulting from the 
     amendment made by subsection (a), does not result in any 
     increase or decrease in the expenditures under title XVIII of 
     the Social Security Act on a fiscal year basis.

 Mr. REID. Mr. President, I rise in strong support of the 
``Reinstatement of the Medicare Rehabilitation Benefit Act of 1998'' 
(RMRA). This legislation repeals a provision in the Balanced Budget Act 
of 1997 (BBA 97) that imposes a $1500 annual per beneficiary cap on 
Medicare outpatient rehabilitation services. RMRA directs the Health 
Care Financing Administration (HCFA) to develop and implement an 
alternative payment system that is based on individual diagnosis and 
prior therapy in both inpatient and outpatient facilities by January 1, 
2000.
  The BBA created annual caps for two categories of therapy provided to 
beneficiaries under Medicare Part B: a $1500 annual cap on physical 
therapy and speech language combined; and a separate cap for 
occupational therapy. These arbitrary limits on rehabilitation therapy 
were hastily included in the BBA without the benefit of Congressional 
hearings or thorough review by HCFA. As a result, the $1500 limits bear 
no relation to the medical condition of the patient, or the health 
outcomes of the rehabilitative services.

[[Page S7183]]

  The $1500 cap would create serious access and quality problems for 
Medicare's oldest and sickest beneficiaries. Senior citizens who suffer 
from common conditions such as stroke, hip fracture, and coronary 
artery disease, will not be able to obtain the rehabilitative services 
they need to resume normal activities of daily living. A stroke patient 
typically requires more than $3,000 in physical therapy alone. 
Rehabilitation therapy for a patient suffering from Multiple Sclerosis 
or ALS costs even more. Without access to outpatient therapy, patients 
must remain in institutional settings longer, be transferred to a 
higher cost hospital facility, or in some cases, just go without 
necessary services.
  Coverage for rehabilitative therapy should be based on medically 
necessary treatment, not arbitrary spending limits that ignore a 
patient's clinical needs. I urge you to join me in protecting 
Medicare's most vulnerable beneficiaries by supporting the 
``Reinstatement of the Medicare Rehabilitation Benefit Act of 
1998''.
 Mr. HOLLINGS. Mr. President, I am delighted to join my 
colleagues, Senator Grassley, Senator Reid, and Senator D'Amato in 
introducing legislation which would repeal provisions of the Balanced 
Budget Act of 1997 pertaining to the establishment of annual caps of 
$1,500 on all outpatient rehabilitation services except those furnished 
in a hospital outpatient department.
  The ``Reinstatement of the Medicare Rehabilitation Benefit Act of 
1998'' that we introduce today is made necessary because of the 
negative impact these provisions will have on Medicare beneficiaries 
who require therapy services. Senior citizens suffering from medical 
conditions common to the elderly such as stroke, hip fracture, and 
coronary artery disease will not be able to obtain the rehabilitative 
care they need to resume normal activities of daily living because of 
this arbitrarily imposed cap. This is especially true in South 
Carolina, which has a significant number of Medicare recipients who 
live in rural areas. A patient who has met the $1,500 cap will have no 
choice but to seek care in a hospital outpatient department, not only 
at a much greater distance but also at a substantially higher cost.
  The ``Reinstatement of the Medicare Rehabilitation Benefit Act'' 
would also repeal the provision combining speech-language pathology and 
physical therapy services under the same $1,500 cap. These are two very 
separate and distinct functions, and there is no rational basis for 
including them under one cap. As my constituent, Beth Fleming of 
Anderson, South Carolina, said recently, and I agree, ``Patients should 
not have to choose between walking and talking.''
  I urge my distinguished colleagues to join Senator Grassley, Senator 
Reid, Senator D'Amato and me in supporting this legislation.
                                 ______
                                 
      By Mr. GRAMS (for himself, Mr. Faircloth, Mr. Bryan, Mr. 
        Thurmond, Mr. Breaux, Mr. Allard, Mr. Akaka, Mr. Brownback, Mr. 
        Inouye, Mr. Domenici, Mr. Reid, Mr. Gregg, Mr. Ashcroft, Mr. 
        Bennett, Mr. Mack, Mr. McCain and Mr. Enzi):
  S. 2223. A bill to provide a moratorium on certain class actions 
relating to the Real Estate Settlement Procedures Act of 1974; to the 
Committee on the Judiciary.


                 mortgage litigation reform act of 1998

 Mr. GRAMS. Mr. President, today I introduce the Mortgage 
Litigation Reform Act of 1998. This legislation is a narrowly crafted, 
bipartisan bill. Its goal is to provide relief from frivolous class 
action lawsuits resulting from the regulatory ambiguity over the 
payment of certain fees by mortgage bankers to mortgage brokers.
  A spate of recent class action lawsuits have called into question the 
legality of yield spread premiums, although there is no statute or 
regulation ruling that such fees are per se illegal. This legislation 
simply places a moratorium, from the date of enactment through July 1, 
1999, on class action lawsuits regarding these fees. It is important to 
note that the bill is narrowly crafted and does not prohibit personal 
rights of action or criminal prosecution related to these payments.
  During the moratorium period, I am hopeful that either the Department 
of Housing and Urban Development will publish a clear ruling governing 
the payment of yield spread premiums or, better yet, Congress will 
achieve the long sought after overhaul of the Real Estate Settlement 
Procedures Act (RESPA) and Truth In Lending Act (TILA).
 Mr. FAIRCLOTH. Mr. President, I introduce legislation entitled 
the ``Mortgage Litigation Reform Act of 1998'' to stop the filing of 
frivolous class action lawsuits in the mortgage lending process. At 
dispute in these class actions is whether the payment of a yield spread 
premium by a lender to another lender or a mortgage broker is a 
violation of RESPA (Real Estate Settlement Procedures Act).
  The Real Estate Settlement Procedures Act, a federal statute enacted 
in 1974, was passed to provide consumers with meaningful disclosures 
about the home buying process and protect them from paying unnecessary 
and costly fees when buying a house. Today, the statute is confusing to 
consumers and no longer meets the needs of industry because of changes 
in technology and business affiliations. I held two hearings on RESPA 
and the Truth in Lending Act (TILA) last summer and found that consumer 
groups and the real estate and lending community agreed that there must 
be major overhaul of the statutes.
  One issue among these problems is whether payment of a yield spread 
premium is legal. HUD's own home settlement booklet indicates that a 
mortgage broker may be paid by a borrower, a lender or both. This would 
indicate to a reasonable person that the payments are legal. However, 
when I questioned HUD point-blank on the legality of these fees during 
the hearings last summer, the Department refused to give me a straight 
answer. Instead, the agency proposed a cumbersome and confusing rule 
that would have given legality to some of the fees in certain 
circumstances. Many of us believed that the rule if put into final form 
would have encouraged more frivolous litigation.
  Today, consumer and industry groups and HUD and the Federal Reserve 
are working on legislative recommendations to overhaul RESPA and TILA. 
We hope to have hearings on those recommendations later this year and 
pass a reform package next session. While these efforts are underway, I 
believe that we should pass this narrowly-tailored moratorium on class 
action lawsuits until the issue of yield spread premiums is clarified 
by HUD or by the Congress. This bill would not affect the filing of 
private rights of action by individual consumers so that the legality 
can be adjudicated on a case-by-case basis.
  I believe that much work still needs to be done on RESPA and TILA 
reform but this legislation will enable one of those controversial 
issues to be set aside for the time being.
                                 ______
                                 
      By Mr. DODD (for himself, Mr. Hagel, Mr. Biden, and Mr. Roberts):
  S. 2224. A bill to authorize the President to delay, suspend, or 
terminate economic sanctions if it is in the national security or 
foreign policy interest of the United States to do so; to the Committee 
on Foreign Relations.


                 SANCTIONS RATIONALIZATION ACT OF 1998

  Mr. DODD. Mr. President, I rise today to introduce legislation on 
behalf of myself, Senators Hagel, Biden and Roberts. The objective of 
this bill is to restore some rationality to what has become a very 
complex and problematic compilation of Congressionally imposed 
unilateral economic sanctions laws.
  The bill we are introducing today--the ``1998 Sanctions 
Rationalization Act'' would give the President the authority to delay, 
suspend or terminate a sanction that he believes not to be in the 
United States national interest. But it would also give Congress an 
opportunity to review each Presidential exercise such authority, and to 
enact a resolution of disapproval to maintain a particular sanction, 
under the expedited procedures, within thirty days of Presidential 
action.
  Mr. President, on June 4, I joined with Senator Lugar and others as a 
cosponsor of S. 1413--the Enhancement of Trade, Security, and Human 
Rights Through Sanctions Reform Act. This bill creates a framework for 
future

[[Page S7184]]

consideration by the legislative and executive branches of unilateral 
economic sanctions. I applaud Senator Lugar for his vision in putting 
together this piece of legislation in cooperation with Congressman Lee 
Hamilton.
  I believe that the legislation I am introducing today complements the 
efforts of Senator Lugar and Congressman Hamilton by dealing with 
sanctions that are already imbedded in statute and which have come to 
threaten the ability of the President of the United States to conduct 
United States foreign policy in furtherance of U.S. national interests.
  Mr. President, U.S. sanctions--predominantly economic, but also 
political and sometimes even military penalties--are being employed 
more and more frequently for a variety of purposes. The United States, 
more than any other country, uses sanctions to further its many, 
sometimes conflicting, foreign policy objectives. We have used them 
among other things to discourage the proliferation of weapons of mass 
destruction and transfer of ballistic missiles, to advance human 
rights, to end state supported terrorism, to discourage armed 
aggression, to protect the environment, to thwart drug trafficking, and 
in isolated instances to oust unacceptable governments.
  Some recently released statistics illustrate just how pervasive U.S. 
sanctions have become, and at what cost to the United States. Since 
World War II, the United States has imposed sanctions on roughly 100 
occasions--more than sixty percent of those sanctions have occurred 
just since 1993. Between 1993-1996, sixty-one U.S. laws and executive 
orders have been enacted authorizing various types of unilateral 
economic sanctions against thirty-five countries in the name of foreign 
policy. The sanctioned countries encompass 42% of the world's 
population--roughly 2.3 billion potential consumers of U.S. goods and 
services.
  In our zeal to punish foreign governments for offensive behavior, we 
have managed to cut ourselves off from approximately 20% of the world's 
export markets. Our allies and trading partners think we are crazy. 
They have happily filled the American void, often times gaining mid to 
long term competitive advantages in these markets even after specific 
sanctions have been repealed, to the extent that happens.
  Rarely, if ever, Mr. President is a careful and thoughtful analysis 
done of the costs and benefits of the proposed sanction or the 
likelihood of its altering the sanctioned behavior. In most instances, 
the issue is rushed to the Senate or House floor, so that the Congress 
can express its outrage at some perceived misdeed that just appeared in 
print or live on CNN. To the best of my knowledge there has never been 
any systematic effort on the part of the Congress to review sanctions 
once imposed, to consider whether they have achieved their objectives 
or have turned out to be counterproductive.
  Unilateral economic sanctions have truly become the foreign policy 
``flavor of the month'' imposed by the Congress, in the heat of the 
moment, often at the behest of special interest lobbies. Mr. President, 
we may make ourselves feel good by voting to cut off foreign access to 
United States markets, goods, people and ideas. We may even please the 
particular domestic constituency that has clamored for Congressional 
action. But in most instances we simply fool ourselves if we think that 
we have done much, if anything, to alter the behavior or policy of the 
government that has been targeted. In fact, we have probably made it 
easier for governments, particularly the authoritarian ones, to resist 
any internal pressures to change, because they can blame their domestic 
failures on U.S. sanctions policy.
  Since we don't appropriate funds to cover the actual private sector 
costs incurred when sanctions are imposed, some in the Congress have 
come to view them as a cost free way to influence the Administration's 
conduct of foreign policy. Nothing could be further from the truth. 
Sanctions are one of the most pernicious ``unfunded mandates'' that the 
Congress can impose on the private sector, with virtually no prior 
consultation or input from it.
  According to the Institute for International Economics, a Washington-
based think tank, the cost of sanctions in 1995 alone was nearly $20 
billion in lost exports and 200,000 lost American jobs. If we carry 
those costs forward by five years, these same sanctions would cost the 
American economy $100 billion in foregone exports and one million jobs. 
That is a high price to pay for a policy that is successful. More often 
than not U.S. sanctions fail to alter behavior or policies.
  The costs incurred due to sanctions are more than simply direct 
economic costs. There are indirect costs as well--tangible and 
intangible. The cost to us diplomatically and politically with our 
friends and allies can be extremely high. I suspect, for example, that 
United States officials have expended a great deal of our diplomatic 
capital in defusing the anger of European officials and other 
interested governments concerning the extra-territorial application of 
certain recently enacted sanctions law. Such capital is not 
inexhaustible, and should be husbanded for those occasions when 
international support is critical to the United States effectively 
dealing with a major national security or foreign policy challenge--
Iraq, Bosnia, Pakistan, India and even Kosovo come readily to mind.
  The time has come to call a halt to the indiscriminate use of 
unilateral sanctions as the foreign policy instrument of ``first 
resort.'' Perhaps we should consider the ``old fashioned'' way of 
conducting foreign policy--it's called diplomacy. While diplomacy may 
take longer to produce results and isn't as dramatic as voting to 
impose draconian measures against other countries, it more often than 
not gets us where we want to go.
  In saying that, I am not arguing that the United States should remove 
the sanctions option from its foreign policy arsenal, just as I would 
never suggest that we rule out the use of force as an option. Clearly 
there are occasions when sanctions or military force are the 
appropriate responses to a particular situation--Iraq for one. However, 
in recent years we have elected to exercise the sanctions option far 
too frequently, and in so doing we are undermining its continued 
effectiveness as a U.S. foreign policy tool.
  The United States, particularly the Congress must become more precise 
in the choice of sanctions, more realistic with respect to what is 
achievable, better informed of the potential costs to the U.S. economy 
and the American people, and more sensitive to the potential impact on 
innocent populations and on relations with other governments. It is 
especially problematic when Congress enacts sanctions and fails to 
include any flexibility in the statute to enable the President to 
respond effectively to what we all know is an ever changing political 
landscape. I believe that some of the measures enacted by the Congress 
are actually harmful to our long term foreign policy interests.
  A perfect example of this has occurred recently with respect to India 
and Pakistan. Because of the so called Pressler amendment, President 
Clinton had very little to offer in the way of ``carrots'' to Pakistan 
to dissuade it from following India in testing its nuclear weapons 
capabilities. The President has even less flexibility today to respond 
to the new threat that exists following both India's and Pakistan's 
defiance of the international community's pleadings to forgo testing. I 
say this because under existing nuclear non-proliferations statutes 
enacted by the Congress, sanctions are automatic and the President has 
no authority to lift them absent Congressional action to modify 
existing law.
  The international reaction to recent events in India and Pakistan has 
been very telling. Even our closest allies who share our concerns about 
nuclear proliferation have failed to follow our lead by imposing 
economic sanctions on India and Pakistan. Why? Because they do not 
believe that such an approach is likely to force India and Pakistan to 
sign onto international non-proliferations regimes. In fact, quite the 
opposite. It is likely to further isolate them, heightening domestic 
political pressure in both countries and encouraging each one to 
perfect even further their nuclear weapons capability and God forbid, 
even to consider using it against one another in a moment of paranoia.
  As I have said earlier, I do not believe that we should ever totally 
rule out the use of sanctions as a foreign policy instrument. But 
before we impose them we should be clear about

[[Page S7185]]

what our foreign policy goals are. We should be selective in our choice 
of sanctions. They should be imposed for a finite time period, with an 
option to extend them, if the situation warrants it. We should also 
include a certain measure of flexibility in any Congressionally imposed 
sanctions to allow the Secretary of State and the President to fulfill 
their Constitutional obligations to conduct our nation's foreign 
policy--without their arms tied behind their backs.
  We should also endeavor to get other governments to join us in 
imposing sanctions. Multilaterally imposed sanctions have a far better 
likelihood of succeeding than those that are unilaterally imposed and 
they minimize the competitive disadvantages to the U.S. economy. This 
will mean that we must have patience as diplomatic efforts are 
undertaken to garner international support.
  If we find that we must go it alone, we should keep to a minimum the 
adverse effects of our sanctions on third countries, particularly 
friends and allies. We should also be more selective in the choice of 
sanctions we impose --opting for those that will be felt by the 
offending government officials, rather than those that are more general 
in scope and harm the general population--people who in most cases have 
little or no ability to influence the behavior of their government 
leaders.
  With economic sanctions fast becoming the very core of United States 
foreign policy, I believe that a more thoughtful and comprehensive 
approach to them is desperately needed before we do serious harm to our 
own national interests. The legislation introduced by Senator Lugar 
would provide such a framework in the context of future sanctions. The 
bill I am introducing today would create a similar framework of 
rationality with respect to existing sanctions regimes.
  I believe that the Lugar and Dodd bills, taken together, will help to 
sharpen the focus of the debate on this important subject. I believe 
such a focus is long overdue. I look forward to working with Senator 
Lugar and other interested Senators in forging a comprehensive 
legislative package that incorporates the approaches contained in the 
two bills so that our colleagues will have an opportunity to vote on 
these very important matters in the very near future.
  Mr. BIDEN. Mr. President, I am pleased to join my friend from 
Connecticut, as well as Senators Hagel and Roberts, in introducing the 
``Sanctions Rationalization Act of 1998.''
  The bill establishes a means for the President to delay, suspend, or 
terminate certain unilateral economic sanctions, or a portion thereof, 
if doing so is important to U.S. national interests. The bill also 
provides a means for Congress to overturn any such decision, and 
provides for expedited procedures within the House and Senate for 
consideration of a resolution to reverse a Presidential decision.
  I have become increasingly concerned that Congress' efforts to impose 
sanctions is unduly hampering the President's ability to conduct U.S. 
foreign policy. To say this is not to suggest that Congress has 
exceeded its authority in the foreign affairs area. Under the 
Constitution, both Congress and the President have considerable foreign 
policy powers. As Professor Edward Corwin, a noted authority on the 
Presidency, once wrote, the Constitutional design on foreign policy 
tenders an ``invitation to struggle.''
  Indeed, Congress has several powers under the Constitution in the 
foreign affairs area.
  It has, among other things, the power of the purse, the power to 
declare war, the power to raise and support the military, and the power 
to regulate foreign commerce.
  Congress is well within its power to impose sanctions against foreign 
governments. And in many instances, sanctions--or the embarrassment to 
the foreign government which flows from their imposition--have had a 
positive effect in advancing U.S. policy.
  But what Congress cannot do is to conduct the daily business of 
diplomacy. Only the President can undertake negotiations with foreign 
governments and leaders. And any law which limits the ability of the 
United States to engage with foreign nations necessarily limits the 
options available to the President as he seeks diplomatic solutions to 
foreign policy problems.
  Foreign policy, however, usually involves a complex mosaic of 
interests, and requires use of a wide range of diplomatic instruments. 
Moreover, foreign policy is not static--constantly changing 
circumstances often require calibrations in policy.
  The imposition of statutory sanctions, in many cases, serves to 
undermine the ability of the President to balance the competing 
interests and to respond to changes on the ground overseas.
  In sum, statutory sanctions are often a blunt instrument, when the 
situation at hand may call for an instrument which the President can 
fine-tune.
  The most significant part of this legislation, in my view, is that it 
gives the President the power to calibrate sanctions once imposed--that 
is, to adjust or modify the application of a sanction as the situation 
may warrant. Accordingly, he can use the authority in this bill to try 
to induce the desired action by the foreign government by lifting or 
modifying a sanction progressively.
  The bill does not allow the President to terminate those measures 
that are imposed on a multilateral basis, including obligations under 
resolutions of the United Nations Security Council, nonproliferation 
and export control arrangements like the Australia Group, the Nuclear 
Supplier's Group, the Missile Technology Control Regime, and the 
Wassenaar Arrangement.
  The bill also does not allow the President to terminate those 
measures taken under treaty obligations, such as those under the 
Chemical Weapons Convention, the Nuclear Non-Proliferation Treaty and 
the Biological Weapons Convention.
  Further, the bill does not apply to several types of measures, 
including foreign military financing, export controls and restrictions 
under the Arms Export Control Act, any measure taken pursuant to 
section 307 of the Chemical and Biological Weapons Control and Warfare 
Elimination Act of 1991, any measure to restrict imports of products 
and services in order to protect domestic health or safety, any measure 
to enforce a federal criminal law, and any retaliatory trade measure 
authorized under our trade statutes or international trade agreements.
  In proposing this legislation, I do not envisage that the authority 
granted to the President would be employed casually. Instead, like 
analogous waiver authority in the Foreign Assistance Act--section 614 
of that Act--I expect that this power would be used only when 
absolutely necessary, only after careful consideration in the Executive 
Branch, and only after careful consultation with the appropriate 
committees of Congress.
  And in cases where the President does abuse the authority this bill 
grants him, Congress would still have the power to reverse the 
President's decision, and resolutions to do so will be entitled to 
expedited procedures which would ensure their prompt consideration.
  I wish to emphasize that I do not regard this bill as a final 
product. Rather, it is a work in progress. This is a complicated 
subject; defining what constitutes a ``sanction'' is a difficult 
undertaking, as is drafting the necessary exclusions.
  Accordingly, I welcome contributions from our colleagues, the 
Executive Branch, and non-governmental organizations.
  Of course, this is not the only legislation on this subject. Our 
colleagues, Senator Lugar, and Representative Hamilton, have made an 
important contribution in promoting the debate on this subject in 
introducing their sanctions reform legislation. The Majority and 
Minority Leaders plan to appoint a special task force to review the 
issue, and I am certain that legislative proposals will emerge from 
those discussions.
  In closing, I should state that I am under no illusion that passing 
this legislation will be easy. It may be that we cannot reach a 
consensus on acceptable legislation in the remaining months of the 
105th Congress.
  What is important now is that the Executive and the Congress have 
initiated a dialog, on a bipartisan basis, on a subject of considerable 
importance to our national interests. I look forward to engaging in 
that debate in the weeks and months ahead.

[[Page S7186]]

                                 ______
                                 
      By Mr. GRAHAM (for himself and Mr. Mack):
  S. 2225. A bill to amend the Outer Continental Shelf Lands Act to 
prohibit new leasing activities in certain areas off the coast of 
Florida, and to permit exploration, production, or drilling activities 
on existing leases only if adequate studies are performed, to require 
adequate information and analyses for development and production 
activities, and to allow states full review of development and 
production activities; to the Committee on Energy and Natural 
Resources.


                      FLORIDA COAST PROTECTION ACT

 Mr. GRAHAM. Mr. President, today with my good friend and 
colleague Senator Mack I introduce the ``Florida Coast Protection 
Act''. This legislation will protect Florida's fragile coastline from 
outer continental shelf leasing and drilling in three important ways.
  First, it transforms the annual moratorium on leasing and preleasing 
activity off the coast of Florida into a permanent ban covering 
Planning Areas in the Eastern Gulf of Mexico, the Straits of Florida, 
and the South Atlantic Planning Area.
  Second, it raises the bar for approval of development and production 
requests on existing leases off the coast of Florida. It establishes a 
Joint Federal-State Outer Continental Shelf Task Force comprised of 
experts from the Environmental Protection Agency, the Minerals 
Management Service, the National Oceanic and Atmospheric 
Administration, the Fish and Wildlife Service, the National Marine 
Fisheries Service, the Biological Resources Division of the United 
States Geological Survey, state representatives, and professional 
scientist nominated by the National Academy of Sciences. This Joint 
Task Force will ensure that all data required to make a determination 
of the environmental and economic effects of oil and gas production and 
development on local communities is available to the Secretary of 
Interior and the State of Florida.
  Third, the Florida Coast Protection Act corrects an egregious 
conflict in regulatory provisions where an affected state is required 
to make a consistency determination for proposed oil and gas production 
or development under the Coastal Zone Management Act prior to receiving 
the Environmental Impact Statement (EIS) from the Mineral Management 
Service. Our bill requires that the EIS is provided to affected states 
six months before they make a consistency determination.
  Mr. President, you may recall that we introduced similar legislation 
under the same title in June of 1997. The focus of that bill was the 
cancellation of the lease tract 17 miles off the coast of Pensacola, 
resulting in the elimination of six oil and gas leases. Since that 
time, these leases were relinquished by the Mobil Corporation back to 
the control of the U.S. Department of the Interior. In addition, these 
areas are covered by the moratorium on leasing in the Eastern Gulf--a 
protection that President Clinton recently extended through 2012 as 
part of the Year of the Ocean efforts to protect this extremely 
valuable natural resource.
  What would this bill mean for Florida? The elimination of preleasing 
activity and lease sales off the coast of Florida protects our economic 
and environmental future.
  In 1997, over 47 million tourists visited Florida, spending $41 
billion. The five western counties of the Florida Panhandle brought in 
over $8 million from tourist development tax in 1996. Three cities in 
this area--Panama City, Pensacola, and Fort Walton Beach--recorded over 
$1.5 billion in tourism and recreation taxable sales during the same 
period.

  It is home to some of the richest estuarine areas in the world. These 
habitats provide an irreplaceable link in the life cycle of both marine 
and terrestrial species. Florida's commercial fishing industry relies 
heavily on these estuaries as they support the nurseries for most 
commercially harvested fish. In addition, nearly 90 percent of the reef 
fish resources in the Gulf of Mexico are caught on the West Florida 
Shelf.
  Mr. President, the environmental and economic value of this area is 
evidenced by the many state and federal land holdings in designated 
environmental preservation, conservation, and recreation areas. Fifty 
of these areas are located along 175 miles of coastline in the Florida 
Panhandle.
  In testimony before the House Resources Subcommittee on Energy and 
Mineral Resources on May 14, 1998, Florida Governor Lawton Chiles 
provided the following perspective on the potential damage to Florida's 
coastline that could be caused by offshore drilling. He said that ``oil 
spills remain the most visible . . . however, there are other 
detrimental environmental effects that these activities could have on 
the shallow, clean water marine communities found on the Florida outer 
continental shelf . . . [including] . . . physical disturbances caused 
by anchoring, pipeline placement and rig construction, the resuspension 
of bottom sediments, and the chronic pollution from discharges of 
drilling effluents, production effluents, and possible accidental 
releases of oil or other toxic material . . .''
  Throughout my time in the Senate, I have opposed offshore oil 
drilling off the coast of Florida because of the threat it presents to 
the state's greatest natural and economic resource--our coastal 
environment. With my colleagues in the Florida delegation, I have 
worked successfully to obtain moratoria on additional leasing off the 
west Florida coast. With the passage of the Florida Coast Protection 
Act, this annual moratoria will evolve into permanent protection for 
the Florida coastline.
  The Florida Coast Protection Act is a milestone in our attempts to 
protect our natural coastal resources in the State of Florida and 
throughout the nation. I urge my colleagues to support this effort.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2225

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Florida Coast Protection Act 
     of 1998''.

     SEC. 2. LEASING ACTIVITY OFF THE COAST OF FLORIDA.

       (a) Prohibition.--Section 8 of the Outer Continental Shelf 
     Lands Act (43 U.S.C. 1337) is amended--
       (1) in subsection (a)(1), by striking ``The Secretary'' and 
     inserting ``Except as provided in subsection (p), the 
     Secretary''; and
       (2) by adding at the end the following:
       ``(p) Leasing Activity Off the Coast of Florida.--
       ``(1) Definitions.--In this subsection:
       ``(A) Adequate.--The term `adequate', in reference to 
     information means, as defined by the National Research 
     Council reports described in paragraph (2)(E)--
       ``(i) sufficiently complete so as to provide for 
     appropriate breadth and depth of basic scientific information 
     in all relevant disciplines needed to understand the 
     environmental risks associated with OCS decisions; and
       ``(ii) of sufficient scientific quality to be repeatable, 
     reliable, and valid in measurements and analyses with 
     appropriate subjects methods of inquiry and interpretation 
     that reflect the state of good practice in each scientific 
     field.
     Methods of inquiry and interpretation must reflect the state 
     of good practice in each scientific field.
       ``(B) Covered area.--The term `covered area' means--
       ``(i) Eastern Gulf of Mexico Planning Area (as established 
     by the Secretary) which is adjacent to the State of Florida 
     as defined by 43 U.S.C. 1333(a)(2)(A);
       ``(ii) the Straits of Florida Planning Area (as established 
     by the Secretary); and
       ``(iii) the South Atlantic Planning Area (as established by 
     the Secretary) which is adjacent to the State of Florida as 
     defined by 43 U.S.C. 1333 (a)(2)(A);
     within 100 miles off the coast of Florida.
       ``(C) Joint task force.--The term ``joint task force'' 
     means the Joint Federal-State Outer Continental Shelf Task 
     Force established by paragraph (3)(C).
       ``(D) Preleasing activity.--
       ``(i) In general.--The term `preleasing activity' means an 
     activity relating to a lease that is conducted before a lease 
     sale is held.
       ``(ii) Inclusions.--The term `preleasing activity' 
     includes--

       ``(I) the scheduling of a lease sale;
       ``(II) the issuance of a request for industry interest;
       ``(III) the issuance of a call for information or a 
     nomination;
       ``(IV) the identification of an area for prospective 
     leasing;
       ``(V) the publication of a draft or final environmental 
     impact statement or a notice of sale; and
       ``(VI) the performance of any form of rotary drilling in a 
     prospective lease area.

       ``(iii) Exclusions.--The term `preleasing activity' does 
     not include an environmental,

[[Page S7187]]

     geologic, geophysical, economic, engineering, or other 
     scientific analysis, study, or evaluation.
       ``(E) Report of the national research council of the 
     national academy of sciences.--The term `report of the 
     National Research Council' means--
       ``(i) the report entitled ``The Adequacy of Environmental 
     Information for Outer Continental Shelf Oil and Gas 
     Decisions: Florida and California'' issued in 1989 by the 
     National Research Council's Committee to Review the Outer 
     Continental Shelf Environmental Studies Program and supported 
     by the President's Outer Continental Shelf Leasing and 
     Development Task Force through Department of the Interior 
     Contract No. 1435000130495; and
       ``(ii) parts I, II, and III of the document entitled 
     ``Assessment of the United States Outer Continental Shelf 
     Environmental Studies Program'' issued in 1990 and 1992 by 
     the committee referred to in subclause (I), with support from 
     Department of the Interior Contract No. 14-12-001030342.
       ``(2) Prohibition of preleasing activities and lease 
     sales.--The Secretary shall not conduct any preleasing 
     activity or hold a lease sale under this Act in a covered 
     area.
       ``(3) Activities in existing lease areas.--
       ``(A) In general.--With respect to a lease in a covered 
     area entered into before the date of an enactment of this 
     subsection, the Secretary may approve or permit an 
     exploration, production, or drilling activity in the lease 
     area only if--
       ``(i) all assessments, studies, and research required for 
     the area under subparagraph (B) have been completed;
       ``(ii) all such assessments, studies, and research have 
     been peer reviewed, by qualified scientists, as provided for 
     and supervised by the joint task force; and
       ``(iii) the Secretary submits to Congress and the Governor 
     of the State of Florida a report, which has been approved by 
     the joint task force, certifying that the available physical 
     oceanographic, ecological, and socioeconomic information, and 
     other information pertaining to the environment, endangered 
     and threatened species, and marine mammals, is adequate to 
     enable the Secretary to carry out the responsibilities of the 
     Secretary in the area under the Outer Continental Shelf Lands 
     Act (43 U.S.C. 1331 et seq.) and other laws, with a minimal 
     level of uncertainty, with respect to the proposed 
     exploration, production, or drilling activity.
       ``(B) Assessments, studies, and research.--The assessments, 
     studies, and research referred to in subparagraph (A) are as 
     follows:
       ``(i) Eastern gulf of mexico planning area.--With respect 
     to the area described in paragraph (1)(B)(I):

       ``(I) The Assessment of the Historical, Social, and 
     Economic Impacts of Outer Continental Shelf Development on 
     Gulf Coast Communities, to be conducted by the Minerals 
     Management Service.
       ``(II) The series of studies identified as the Northeastern 
     Gulf of Mexico Coastal and Marine Ecosystem Program, to be 
     conducted by the Biological Resources Division of the United 
     States Geological Survey.
       ``(III) Any additional physical oceanographic studies 
     identified and recommended by the Northeast Gulf of Mexico 
     Physical Oceanography Workshop conducted by the Minerals 
     Management Service in conjunction with Florida State 
     University and identified in the workshop proceedings OCS 
     Study MMS 94-0044.
       ``(IV) Any additional studies or research in the area 
     identified by the joint physical oceanographic/ecological 
     workshop to be held by the Minerals Management Service in 
     conjunction with the University of West Florida in August 
     1998.
       ``(V) Any additional studies or research in the area needed 
     to acquire information on a subject on which a report of the 
     National Research Council found available information to be 
     less than adequate.
       ``(VI) Any additional physical oceanographic, ecological, 
     or socioeconomic or other environmental studies, endangered 
     and threatened species surveys, or marine mammal surveys 
     requested by the Governor of the State of Florida and 
     recommended by the joint task force to minimize the 
     uncertainty about the effects of the proposed preleasing 
     activity, leasing, or exploration, production, or drilling 
     activity on the marine environment, the coastal environment, 
     and the human environment of the State of Florida, including 
     any such request for the expansion of assessments, duties, or 
     research described in subclauses (I) through (V).

       ``(ii) Straits of florida planning area.--With respect to 
     the area described in paragraph (1)(B)(ii):

       ``(I) An assessment of the Social and Economic Impacts of 
     Outer Continental Shelf oil and gas activities on Florida's 
     coastal communities.
       ``(II) Any additional studies or research in the area 
     needed to acquire information on a subject on which a report 
     of the National Research Council found available information 
     to be less than adequate.
       ``(III) Any additional physical oceanographic, ecological, 
     or socioeconomic or other environmental studies, endangered 
     and threatened species surveys, or marine mammal surveys 
     requested by the Governor of the State of Florida and 
     recommended by the joint task force to minimize the 
     uncertainty about the effects of the proposed preleasing 
     activity, leasing, or exploration, production, or drilling 
     activity on the marine environment, the coastal environment, 
     and the human environment of the State of Florida.

       ``(iii) South atlantic planning area.--With respect to the 
     area described in paragraph (1)(B)(iii):

       ``(I) An assessment of the social and economic impacts of 
     Outer Continental Shelf oil and gas activities on Florida's 
     coastal communities.
       ``(II) Any additional studies or research in the area 
     needed to acquire information on a subject on which a report 
     of the National Research Council found available information 
     to be less than adequate.
       ``(III) Any additional physical oceanographic, ecological, 
     or socioeconomic or other environmental studies, endangered 
     and threatened species surveys, or marine mammal surveys 
     requested by the Governor of the State of Florida and 
     recommended by the joint task force to minimize the 
     uncertainty about the effects of the proposed preleasing 
     activity, leasing, or exploration, production, or drilling 
     activity on the marine environment, the coastal environment, 
     and the human environment of the State of Florida.

       ``(C) Joint task force.--
       ``(i) Establishment.--There is established a Joint Federal-
     State Outer Continental Shelf Task Force for the purpose of 
     carrying out the responsibilities assigned to the joint task 
     force under this paragraph in the areas described in 
     subparagraph (B).
       ``(ii) Responsibilities.--The responsibilities of the Joint 
     Federal-State Outer Continental Shelf Task Force shall be--

       ``(I) to ensure the acquisition and consideration of 
     adequate information in all relevant disciplines needed to 
     understand the environmental risks associated with OCS 
     activities and for the protection of marine, coastal, and 
     human environments of the State of Florida; and
       ``(II) to provide recommendations, with the assistance of 
     the OCS Scientific Committee, on the adequacy, types, and 
     methodologies of assessments, studies, and research needed to 
     enable the Secretary to carry out the responsibilities of the 
     Secretary in the areas under the Outer Continental Shelf 
     Lands Act (43 U.S.C. 1331 et seq.) and other laws, with a 
     minimal level of uncertainty;
       ``(III) to facilitate the resolution of conflicts between 
     the State of Florida and the Minerals Management Service or 
     other Federal agency regarding OCS activities and 
     environmental studies;
       ``(IV) to assist the Minerals Management Service and other 
     Federal agencies in coordinating research; and
       ``(V) to participate in the review of, and assist in 
     obtaining review by, qualified scientists of all assessments, 
     studies and research required by this subsection.

       ``(ii) Membership.--The joint task force shall consist of--

       ``(I) 1 representative, at the assistant secretary level or 
     equivalent, of each of--

       ``(aa) the Environmental Protection Agency;
       ``(bb) the Minerals Management Service;
       ``(cc) the National Oceanic and Atmospheric Administration;
       ``(dd) the United States Fish and Wildlife Service;
       ``(ee) the National Marine Fisheries Service; and
       ``(ff) the Biological Resources Division of the United 
     States Geological Survey;

       ``(II) 6 representatives of the State of Florida, appointed 
     by the Governor of the State; and
       ``(III) 3 members appointed by the Secretary of Commerce 
     from a list of individuals nominated by the National Academy 
     of Sciences who are professional scientists in the fields of 
     physical oceanography, marine ecology, and social science.

       ``(iii) Compensation.--

       ``(I) In general.--Members of the joint task force 
     appointed under clause (ii)(III) may be compensated at a rate 
     to be fixed by the Secretary of Commerce, but not in excess 
     of the maximum rate of pay payable for a position classified 
     above GS-15 under section 5108 of title 5, United States 
     Code, for each day that the member spends performing the 
     duties of the joint task force.
       ``(II) Travel and transportation expenses.--Members of the 
     joint task force appointed under clause (ii)(III), while 
     performing official duties under this Act, shall receive 
     compensation for travel and transportation expenses under 
     section 5703 of title 5, United States Code.

       ``(D) Oil and gas exploration.--Approval of the first 
     exploration plan submitted after the date of enactment of 
     this subsection under section 11 and any other exploration 
     plan deemed significant by the Secretary and each affected 
     State in each of the covered areas shall be subject to the 
     requirement of the preparation of a detailed statement 
     submitted under section 102(2)(C) of the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)).''.
       (b) Oil and Gas Development and Production.--
       (1) Development and production plan.--Section 25(c) of the 
     Outer Continental Shelf Lands Act (43 U.S.C. 1351(c)) is 
     amended--
       (A) by striking ``and'' at the end of paragraph (5);
       (B) by redesignating paragraph (6) as paragraph (8); and
       (C) by inserting after paragraph (5) the following:

[[Page S7188]]

       ``(6) thorough descriptions of the area affected by the 
     proposed development and production activities and analyses 
     of the primary, secondary, and cumulative effects of such 
     development and production on the ocean, coastal, land, 
     human, air, social, and economic resources of the affected 
     area; and
       ``(7) specific information in the necessary detail for 
     inclusion in permit applications for all permits needed to 
     conduct development and production activities whether issued 
     by the Secretary or another Federal or State agency, 
     including air quality permits, water quality permits, 
     applications for permit to drill, applications for the 
     approval of the installation of a lease term pipeline or for 
     the granting of a right-of-way; and platform applications.''.
       (2) Concurrence by the state.--Section 25(d) of the Outer 
     Continental Shelf Lands Act (43 U.S.C. 1351(d)) is amended--
       (1) by striking ``The Secretary shall not'' and inserting 
     the following:
       ``(d) Concurrence by the State.--The Secretary shall not 
     approve any Development and Production Plan or Development 
     Operations Coordination Document or''; and
       (2) by adding at the end the following:
       ``(2) Unavailability of information.--Should any of the 
     information required in subsection (c) not be available for 
     inclusion in the plan for development and production 
     activities at the time that the plan is submitted to the 
     Secretary and subsequently to a State for which the 
     activities described in the plan affects any land use or 
     water use in the coastal State with a coastal zone management 
     program approved pursuant to section 306 of the Coastal Zone 
     Management Act of 1972 (16 U.S.C. 1455), the State's 
     consistency response to the consistency certification that 
     accompanied the plan shall be considered to be preliminary 
     and provisional, subject to the receipt and review of the 
     complete information identified under paragraph (1). When the 
     information required under paragraph (1) is developed and 
     submitted to the Secretary or developed by the Secretary, 
     each affected State shall be afforded the opportunity to 
     complete its consistency review and response.''.
       (3) Major federal action.--Section 25(e)(1) of the Outer 
     Continental Shelf Lands Act (43 U.S.C. 1351 (e)(1)) is 
     amended--
       (A) by inserting before ``At least'' the following: ``The 
     Secretary shall consult with and obtain the concurrence of 
     each affected State in determining if the approval of a 
     development and production plan constitutes to be a major 
     Federal action for purposes of the National Environmental 
     Policy Act of 1969 (42 U.S.C. 4321 et seq.).''; and
       (B) by adding at the end the following
       ``(3) On a finding by the Secretary, in consultation with 
     each affected State, that the approval of a development and 
     production plan is a major Federal action subject to the 
     procedures under the National Environmental Policy Act of 
     1969 (42 U.S.C. 4321 et seq.), the Secretary shall ensure 
     that each affected State for which the development and 
     production plan affects any land use or water use in the 
     coastal zone of the State with a coastal zone management 
     program approved pursuant to section 306 of the Coastal Zone 
     Management Act of 1972 (16 U.S.C. 1455), receives the final 
     environmental impact statement 6 months prior to determining 
     concurrence or objection to the coastal zone consistency 
     certification which must accompany the environmental impact 
     statement pursuant to section 307(c)(3)(B) of the Coastal 
     Zone Management Act of 1972 (16 U.S.C. 1456(c)(3)(B)). 
     Coastal states for which a development and production plan 
     that has been determined to be a major Federal action for 
     purpose of the National Environmental Policy Act of 1969 (42 
     U.S.C. 4321 et seq.), and that affects any land use or water 
     use of a State without an approved coastal zone management 
     program must receive the final environmental impact statement 
     3 months prior to submission of comments and recommendations 
     under subsection (g) .''.
       (4) Approval or disapproval.--Section 25(h)(1) of the Outer 
     Continental Shelf Lands Act (43 U.S.C. 1351(h)(1)) is amended 
     in the first sentence--
       (A) by striking ``within sixty days'' following `the 
     Secretary shall,';
       (B) by striking ``sixty days'';
       (C) by inserting after ``modifications of the plan'' the 
     following: ``, and after receipt of concurrence or objection 
     by a State with respect to the consistency certification 
     accompanying the environmental impact statement pursuant to 
     section 307(c)(3)(B) of that Act (16 U.S.C. 1456(c)(3)(B)) 
     unless the Secretary of commerce makes the finding authorized 
     by section 307(c)(3)(B)(iii) of that Act (16 U.S.C. 
     1456(c)(3)(B)(iii)), whichever is later''; and
       (D) by inserting after require ``modifications of the 
     plan'' the following: ``within 60 days.''.
       (5) Application of section.--Section 25(l) of the Outer 
     Continental Shelf Lands Act (3 U.S.C. 1351(l)) is amended by 
     striking ``may'' and inserting ``shall''.

 Mr. MACK. Mr. President, today with my colleague, Senator 
Graham. I introduce the Florida Coast Protection Act of 1998. It was a 
little over a year ago that we introduced similar legislation to 
protect the pristine environment off of Florida's coasts. That 
legislation would have banned leasing within 100 miles of the coast of 
Florida, and would have canceled six oil and gas leases on the Outer 
Continental Shelf closest to Florida's coast held by the Mobil 
Corporation. Fortunately, soon after we introduced our bill, Mobil 
decided to pull out of those leases. Nevertheless, the threat to 
Florida's coastline remains.
  Mr. President, Floridians have always been justifiably concerned 
about the prospect of oil and gas exploration in the waters off our 
state. We are well aware of the risk this activity poses to our 
environment and our economy because, in Florida. A healthy environment 
means a healthy economy. Millions of people come to our State each year 
to enjoy the climate, our beaches, and our fine quality of life. The 
tourism industry in Florida provides millions of jobs and generates 
revenues in the billion of dollars. It would take only one disaster to 
end Florida's good standing as America's vacationland. We cannot afford 
to let that happen.
  Throughout my tenure in the Senate I have opposed exploration and 
drilling off Florida's coasts. My goal--and the goal the entire Florida 
Congressional delegation--is to permanently remove this threat from our 
coasts. In recent years, we have stood together in opposition to 
drilling and have successfully extended the annual moratorium on all 
new leasing activities on Florida's continental shelf.
  Mr. President, while the opposition of Floridians to oil drilling is 
well-documented, the reality remains that leases have been let, 
potential drilling sites have been explored and it is likely that 
actual extraction of resources could take place within the next few 
years. For these reasons, I rise with Senator Graham to protect our 
state from the ravages of drilling.
  First, our legislation makes permanent the ban on any new leasing 
activity within 100 miles of our coast in order to prevent a repeat of 
the past mistake of leasing in the OCS off Florida. Second, it requires 
additional studies be conducted prior to the issuance of permits of oil 
and gas production on existing leases. Finally, it gives the state 
flexibility to make a determination regarding the consistency of oil 
and gas development and production plans with The Coastal Zone 
Management Act after an environmental impact statement detailing the 
direct and cumulative impacts of the project is completed by the 
Minerals Management Service.
  Mr. President, removing the threat of oil and gas exploration 
permanently from our shores will require responsible leadership from 
the Congress. This legislation, in my view, is absolutely necessary to 
protect our state's economic and environmental well-being. I urge my 
colleagues to support this worthwhile effort. We look forward to 
working with Senator Murkowski, Chairman of the Senate Committee on 
Energy and Natural Resources, to meet this goal.
                                  ____

      By Mr. CRAIG (for himself and Mr. Kempthorne):
  S. 2226. A bill to amend the Idaho Admission Act regarding the sale 
or lease of school land; to the Committee on Energy and Natural 
Resources.


                 amendments to the idaho admissions act

 Mr. CRAIG. Mr. President, today with my friend and colleague 
from Idaho, Senator Kempthorne, introduce a bill to amend the Idaho 
Admission Act of July 3, 1890, to provide for the better management of 
school lands within our state. In doing so, I note that our Idaho 
colleagues Congressmen Chenoweth and Crapo will offer identical 
legislation in the House of Representatives today.
  Mr. President, this piece of legislation is simple, straightforward, 
and of vital importance to my state. It brings federal statute into 
line with amendments to the Idaho Constitution passed by the Idaho 
State Legislature earlier this year and has but one goal: to bring 
about the better management of state lands to the financial benefit of 
our public schools.
  The legislation, along with that passed by the Legislature, were 
developed to implement the recommendations of a special committee of 
state leaders who sought to secure financial security for Idaho's 
schools. This legislation accomplishes the goal with only a few changes 
to current statute.
  First, it allows the Board of Land Commissioners to exercise its 
fiduciary responsibility as managers of the state endowments by 
treating both land and fiscal assets as one trust.

[[Page S7189]]

  Second, the proposal creates an earnings reserve account that will 
serve as a ``shock absorber'' to allow the endowments to provide a more 
predictable income stream.
  Third, it provides increased and stable funding for public education 
by allowing investments in assets that will provide higher rates of 
return. The state committee projected that through this single change, 
public education in our state could receive up to $20 million or more 
annually without raising taxes.
  Fourth, it establishes a land bank account for proceeds from the sale 
of endowment lands. The account gives the Board of Land Commissioners 
the flexibility to re-invest in other real property for the land trust.
  Mr. President, the legislation we introduce today is supported by the 
Idaho State Legislature and was written in compliance with the Joint 
Memorial passed by the Legislature and sent to us earlier this year. It 
is vitally important to our Governor, the Board of Land Commissioners, 
and all those involved in public education in our state.
  Like most western states, certain lands within Idaho were reserved 
for the benefit of public education upon admission to the Union. These 
lands are spread throughout the state and are managed for the financial 
benefit of our children. The Idaho Admission Act is very specific in 
how these lands are to be administered. And while these specifications 
worked well in 1890, they have now become outdated. These century old 
regulations have severely limited the state's efforts to maximize 
funding for public schools. The legislation we introduce today brings 
the management of endowment lands into modern times and employs modern 
financial tools to the benefits of Idaho children.
  Mr. President, I implore my colleagues to act on this measure in a 
timely matter and hope they might all join me in this important 
endeavor to help Idaho public education and the children it 
serves.
 Mr. KEMPTHORNE. Mr. President, this Congress and the citizens 
of Idaho must seize a unique opportunity to pass legislation this year 
that will provide the ability to increase Idaho public education 
funding at least $20 million and possibly $30 million annually. And it 
will do so without raising taxes, cutting services or asking the 
federal government for one thin dime.
  This is no smoke and mirrors.
  This is creativity and innovation at its best.
  This legislation will empower Idaho to be better stewards of the 
endowment created 108 years ago that helps pay for Idaho's public 
education. By using prudent, time-tested investment strategies, the 
endowment will be better equipped to pay for teaching Idaho's children 
in the 21st century.
  Legislation I am introducing today with Senator Larry Craig will 
reform federal law that now restricts the way Idaho's Endowment Fund is 
managed. This legislation, along with constitutional amendments Idaho 
voters must approve in November, will modernize the legal framework of 
the endowment. According to financial experts, this legislative package 
will substantially increase funds available for Idaho school children. 
Specifically, this legislation gives greater flexibility for investing 
and managing endowment funds, and for managing the sale and lease of 
endowment lands.
  The bottom line is that the bill provides more money for educating 
our kids, money that can be used to buy computers, increase teachers' 
salaries, or buy new textbooks.
  And all this without raising taxes, cutting services or asking the 
federal government for one thin dime.
  I will work to get this bill passed in the Senate, in the House of 
Representatives and signed into law by President Clinton this year.
  Here is the background.
  In writing the 1890 law that made Idaho the 43rd state, the citizens 
of Idaho worked with Congress to set aside 3.5 million acres of land as 
a permanent endowment to help finance the education of Idaho children 
in the 20th century.
  Today this endowment is worth a combined total of $3.4 billion that 
consists of 2.5 million acres of land valued at $2.7 billion and an 
endowment fund worth nearly $700 million. In 1997, land and timber 
sales and investment interest generated $110 million of income. Of 
that, $55 million was reinvested into the endowment; $35 million was 
devoted to public schools and $10 million paid for other state 
endowments.
  But we can do even better for Idaho.
  In FY97, this $3.4 billion endowment earned $110 million, or a rate 
of return of just 3%. By virtually any investment standard, this is a 
low rate of return. If this rate increased by just one additional 
percent, to 4%, an extra $32 million would be created.
  The reason the Idaho Endowment Fund earned 3% and not any higher is 
because its investment and management structure is terribly outdated. 
The endowment was created in the 1800s when there was no developed 
securities market and before inflation became a major factor in 
investment decisions. As a result, the fund has no investment in 
equities or other higher yielding instruments. Right now, the endowment 
is exclusively invested in low yielding debt instruments like 
government securities, mortgages, and corporate bonds.
  Right now, the law requires the endowment to be managed the way land 
and money were managed in 1890, not in the 1900s. That's like keeping 
laws on the books that restrict the delivery of health care to 
procedures and drugs that were available in 1800s.
  The problem is simple. Current laws keep Idaho from earning higher 
rates of return. This results in less money being available for school 
children who do not received as much as they might, and it requires 
their parents to pay more taxes to make up the difference. While this 
problem is simple, so is the solution. And that is to allow the fund to 
be invested in a broader array of investments and require that 
investments must follow what is known as the ``prudent investor'' test. 
This test requires managers to use reasonable care and caution in 
making investment decisions.
  In addition, both current federal law and the Idaho State 
Constitution contains provisions that restrict the ability of the land 
trust to maximize the sale and management of the endowment lands.
  If prudent, time-tested investment strategies were applied to the 
land trust and endowment fund, financial experts agree that rates of 
return would increase, investment risk would decrease, and fluctuations 
in annual cash flows would be eliminated.
  The bottom line is this: More money for Idaho school children. And 
less taxes for their parents.
  Congress and the citizens of Idaho must work together to prepare the 
Idaho Endowment to meet the needs of children in the 21st century.
  That's the goal of the legislation Senator Craig and I are 
introducing today.
  Section Five of the original Idaho Admissions Act of 1890 created the 
endowment fund, and rules governing sale and lease of endowment land.
  The measure we are introducing today will replace Section 5 with a 
new section that gives land and investment managers greater flexibility 
in managing both the endowment land and endowment funds. Here is how:
  Under current law, income from lands sales can only be placed in the 
endowment fund. Once placed in the endowment fund, funds cannot be used 
to buy land, even if doing so will ultimately produce more funds for 
education.
  To provide more flexibility for land sales, legislation we are 
introducing today would give the state the authority to establish a new 
land bank fund which can be used to purchase additional land. For 
example, this land bank would allow the state to sell land that is 
difficult to manage in order to purchase land of higher functionality 
and greater investment return.
  Under current law, no flexibility exists for managing endowment fund 
cash flow.
  The legislation we are introducing today establishes an Earnings 
Reserve Fund. This earning reserve can be managed in a way that insures 
a steady, and likely higher source of funds for public education than 
what is now provided. With this earnings reserve in place, the assets 
of the endowment are placed in investments that over time have higher 
yields than less fluctuating, lower yielding investments. This reserve 
fund gives investment managers greater flexibility that have

[[Page S7190]]

higher returns and facilitate a steadier and higher stream of 
distributions.
  Under current law, there is a 10-year limit on leases of endowment 
lands.
  The Craig-Kempthorne legislation repeals the 10-year limit, and 
allows the state land board to establish agreements that will maximize 
the long-term financial return on any lease that is made. This 
provision makes the management of lands available for education 
purposes on equal footing with the management of land in other 
endowments.
  These changes may sound technical but in truth bring common-sense to 
managing the Idaho Endowment. The endowment, if it were created today, 
would be managed as a whole, and would have a diversified mix of equity 
assets, with smaller portions of fixed income and real estate. In 
addition, cash flow would be better regulated to meet a more 
consistent, and higher, level of distributions. This is the 
overwhelming practice of most endowments.
  Instead, the Idaho Endowment is two separate entities, the land trust 
and the endowment fund. There is currently little coordination between 
these two entities, and each part of the endowment is concentrated in a 
particular type of asset. The land trust is dominated by timber, and 
the financial assets are exclusively fixed income, lower-yielding 
assets. There is currently no management of the distributions of 
overall cash flow and the investment policy has no long-term investment 
strategy, or prudent management of cash flow or a policy to decrease 
the concentration of assets to reduce investment risk. This is an 
outdated investment strategy. And there is now no comprehensive plan 
for the entire trust.
  Governor Phil Batt appointed a committee of financial experts and 
public officials to review the endowment and land trust. This 
committee, chaired by Douglas Dorn, reviewed the endowment and the 
trust, and made a number of recommendations. Of particular importance, 
the committee recommended and concluded that the endowment should be 
managed as one fund by one governing body that would decide overall 
investment strategy using modern day so-called prudent investor 
investment strategies.
  The creation of the land bank and the earnings reserve are key 
elements of this strategy. That is what this legislation provides, and 
I urge the Senate to adopt this bill at the first opportunity. And I 
will be urging the citizens of Idaho to do their part this November and 
vote for the constitutional amendments that are needed to modernize the 
legal framework of the Endowment.
  I commend Governor Batt for his leadership and innovation in 
developing this legislative package which will clearly benefit Idaho 
children. I also want to commend Doug Dorn, and his committee of Rep. 
William L. Deal, State Controller J.D. Williams, Robert Montgomery, Dr. 
Thomas Stitzel, Robert Maynard, Michael Brassey, Clive Strong and 
Michael Ferguson for their effective and bipartisan work.
  Today we see the results of the wisdom and foresight of the decisions 
made 100 years ago by Congress and the citizens of Idaho. I trust this 
Congress and the citizens of Idaho will match the wisdom of their 
predecessors, and adopt this legislative package which will provide 
more money so we can teach our children well.

                          ____________________